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O'Malley Rolls Out Gas Tax, Highlights Tough Choices

Republicans say governor's tax proposals will hurt the working families he wants to help.

 

Gov. Martin O'Malley called for legislators to pass a sales tax on gasoline, saying on Wednesday that the decision would be unpopular but much needed.

The governor made his comments in Annapolis during his sixth State of the State speech in which he focused on jobs, taxes and what he called tough choices.

"Asking our fellow citizens to do more will not be popular," O'Malley said. "But without anger, fear or meanness, let’s ask one another: how much less education do we think would be good for our children’s future? How much less education do we want? How much less public safety? How many fewer jobs?  There are costs, and there are values."

Republicans in the General Assembly criticized O'Malley for policies they said will hurt the same middle class working families the governor said he wants to help.

O'Malley described the state of Maryland as strong in his nearly 33-minute address to legislators gathered in the House of Delegates chamber Wednesday.

But at the same time he touted the achievements of his administration over the last six years, O'Malley said that more needs to be done.

O'Malley briefly touched on the gas tax—the most anticipated portion of his message. The governor said a bill would be filed in the next couple days.

"With a growing population and aging infrastructure, we might soon pay an even steeper price," said O'Malley. "Bridges are not like trees. They do not grow broader and stronger with age."

O'Malley's plan calls for phased-in elimination of the 6 percent sales tax exemption on gasoline.

At current prices, opponents estimate that the change would add 18 cents per gallon to the 23 cents in state gas taxes.

The additional revenue would create "7,500 new jobs building needed roads, bridges, and public transit" in Maryland, said O'Malley.

"Now look, I know that every family is still feeling the hurt of this recession," said O'Malley. "The people I serve are the people you serve. I know this is a very, very difficult ask. But nobody else is going to do this for us except for us."

Seeking to increase transportation funding for construction and repair projects that would create jobs, O'Malley intends to submit a bill repealing the sales tax exemption on a gallon of gasoline—phasing it out by 2 percent each year unless the price of gas spikes.

"It's going to be an extremely tough sell," said Senate President Thomas V. Mike Miller Jr., who has advised O'Malley to meet with delegations and various elected officials if he hopes to see the tax increased at all in these difficult times.

Aware that legislators are wary of governors transferring money from the Transportation Trust Fund in order to balance the budget, O'Malley said he would like to safeguard future investments in the fund.

"My understanding is the governor is very receptive to people wanting to protect those funds," said Donald Fry, a former state senator and president and CEO of the Greater Baltimore Committee. "There will be some sort of legally enforceable way to ensure the money in the transportation fund is used for transportation purposes."

Fry is also a member of the Blue Ribbon Commission on Maryland Transportation Funding, which recommended a state constitutional amendment, or "firewall,"to keep those funds from being used for other purposes.

Senate Minority Leader E.J. Pipkin said the so-called "lock box" was a gimmick.

"There are all kinds of gimmicks to get at people's money," said Pipkin, an upper Eastern Shore Republican. "The gas tax is one of the most impactful taxes and working families would have already paid."

"On one hand (O'Malley) talks jobs and on the other hand he kills jobs with higher taxes," he said.

Pipkin said most of the transportation money has gone to fund transit projects that only three percent of state residents use.

"Before we have a discussion about raising taxes we should examine how government spends the money," said Pipkin.

During his speech, O'Malley told legislators he has taken a balanced approach to managing the state's finances during the recession, including making nearly "$800 million in cuts and spending reductions in the current budget. Including those reductions, cuts in state spending total nearly $7.5 billion since O'Malley took office, the governor said.

Critics said those numbers are misleading.

"He's misguiding the public with those words and words mean a lot," said Del. Sue Aumann, a Baltimore County Republican and member of the House Appropriations Committee. "Our budget every year has gone up $1 billion and we have a perpetual deficit of $1 billion."

"The bank of citizens is running dry," Aumann said.

Capital News Service reporters Dave Nyczepir and Mali Krantz contributed to this story.

  • Are you in favor of a gas tax in Maryland?

    (Voting has been closed for this question)
    • Yes.
        14 (5%)
    • No.
        244 (91%)
    • Maybe.
        8 (3%)
    Total votes: 266
  • Your vote will only count once. This is not a scientific poll. View Results Vote!
Related Topics: Martin O'Malley and maryland

JustABill

1:51 am on Thursday, February 2, 2012

This poll like many others on The Patch is very poorly worded. The question should be either "are you in favor of adding a sales tax to gasoline" or "are you in favor of increasing the existing gas tax by 23 cents per gallon and also adding another 25 cents per gallon sales tax thus making the current price of gasoline over $4.00 per gallon?" (25 cents sales tax is based on $3.55/gal average price of regular gasoline and Gov. O'Malley's proposed 17.33% increase in the sales tax making it 7% from the 5% it was for over 30 years before he was elected Governor.)

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jag

10:52 am on Thursday, February 2, 2012

Agree that the poll could be made clearer. I think you're misunderstanding the prospective increase though or maybe I'm misunderstanding your math. How does phasing out the 6% sales tax exemption turn $3.55/gal into over $4 per gallon?

If the sales tax is earmarked for road maintenance (as it should be), I'm all for it (or simply increasing the gas tax would be fine). Road infrastructure is severely underfunded thanks in large part because the gas tax hasn't been raised since 1991. It should have been pegged to inflation all along, but so much for foresight.

"Phasing [the tax exemption] out by 2 percent each year unless the price of gas spikes" makes a lot of sense as well. Gas tax/sales tax is hugely regressive and taking steps to ensure poorer people aren't smacked with higher costs overnight is critical.

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Bubba

11:56 am on Thursday, February 2, 2012

If a 6% sales tax is added to a gallon of gas at $3.55/gal then the new cost is $3.76 per gallon. If you use 20 gallons a week then the increase will cost you on average $4.20 a week. In one year that means about $218 increased spending on gas.

The solution. Get a more gas efficient car and walk/bike more.

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JustABill

3:58 am on Friday, February 3, 2012

jag - My math is spelled out quite clearly above. If Owe'Malley gets his way the sales tax will be 7% not 6% and although he says it will be phased in ultimately it will be fully implemented now or in 3 years. Either way the math is the same in the end. The facts are also clear that this governor and democrat controlled General Assembly cannot be trusted with a trust fund. They have raided both the Transportation Trust Fund and the Bay Restoration Trust Fund to balance their over spent budgets every year since Owe'Malley has been in office. The gas tax was fixed for a reason. To prevent the overreach of the government to and keep the citizens of Maryland from being over taxed. That clearly is not the intent of the current democrat leadership here in Maryland or across the country.

JustABill

1:53 am on Thursday, February 2, 2012

Way to go Maryland Democrats! How can you continue to vote for people like Gov. O'Malley, Sen. Miller, Del. Bush, and all the other tax and spend liberals who are so far out of touch with the trials and tribulations of the citizens of Maryland.

If my notes are correct in just the few short days this General Assembly has been in session, Owe'Malley has asked for a 23 cent increase to the current gasoline tax, a 17.33% (1 cent) increase to the state sales tax, and now an expansion of the sales tax overall to include gasoline adding another 7 cents per dollar to the overall price for gasoline. They have not disclosed the other products and services the expansion of the sales tax will cover, but when they tried before it was 43 items including most "services" that have never had sales tax applied to them. Sales tax is supposed to apply to an actual product that is sold not a "fee" for a service provided that does not include an actual product.

So the Democrats who lie through their teeth about how they are the party that will look out for the poor and working class will pass not one, not two, but at least three tax increases or new taxes that will have the most negative impact on the poor and working class citizens of Maryland possible in this horrific economy. Way to put other people's money where your mouth is Gov. Owe'Malley. Then he says the taxes are needed to increase revenues to maintain schools, roads, and bridges.

These are not the droids you're looking for!

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PATRICIA GUY

4:58 pm on Wednesday, June 20, 2012

COME ON, PEOPLE!! OMALLEY DOESN'T GIVE A DAMN
ABOUT "THE PEOPLE OF MD"...HE KNOWS HE CANNOT
RUN AGAIN FOR GOV, SO HE'S DOING HIS BEST TO GET
EVERY DIME HE CAN OUT OF THE CITIZENS OF THIS
GREAT STATE! HE'S OBAMA MAN, AND HAS ALREADY
BEEN OFFERED A DEPT HEAD POSITION IN OBAMA'S
ADMINISTRATION IF HE IS RE-ELECTED. AND, DON'T
LET O'MALLEY FOOL YOU, HE WANTS TO RUN FOR
PRESIDENT EVENTUALLY. HE AND HIS DEMOCRATIC
PIMPS ARE TRUE EXAMPLES OF HOW DEMOCRATS
ONLY WANT TO GIVE ENTITLEMENTS OUT AND MAKE
US HARD-WORKING PEOPLE PAY FOR THEM! HE'S
DISCUSTING!

hmj

10:19 am on Thursday, February 2, 2012

Way too much fraud and waste in state programs now. Taxes in Maryland are among the highest in the nation. Stop the fraud and waste in Maryland Medicaid and in the Earned Income Tax Credit. Millions are wasted.

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jnrentz1

2:38 pm on Thursday, February 2, 2012

I understand that this article is about the sales tax and gas tax.

What has been proposed in the way of budget cuts?

If Maryland is in the red, Maryland needs to increase revenue and cut spending.

What do you think?

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jag

3:04 pm on Thursday, February 2, 2012

That's hard to say - there have been plenty of cuts to state expenditures during and since the recession, but that's in large part been replaced by federal stimulus money. So while the state has been successful at balancing the budget (in fact, MD finished 2011 with a $1 billion surplus - much higher than VA's surplus even though McDonnell went around talking up how amazing he is and how terrible MD is) it's basically thanks to the Feds bridging the gap (in both states). Now that that well has dried up we'll see a much harder path to balancing the budget.

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JustABill

4:07 am on Friday, February 3, 2012

jag - I know for a fact there is no such budget surplus in Maryland. Balancing the budget is simple. Stop Spending More Than You Bring In. Last time I checked that is how the 99% live so why should the Government of the people, by the people, and for the people not be expected to live by the same rules.

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jag

10:17 am on Friday, February 3, 2012

Justabill - "I know for a fact there is no such budget surplus in Maryland."

What? Feel free to use news sources for facts and a calculator for math. Right now what you THINK you know is pretty off-base.

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Bob

8:49 pm on Sunday, June 24, 2012

Jag, you obviously work for OweMalley as you seem to twist facts around all the time.It's laughable to hear you say there has been cuts when even the news in many liberal sources, such as the Washington post, talk about all of his increases in spending. OweMalley also has a credibility problem, along with his spending problem, and you only seem to add to it. I wish I could spin as well as you. Twisting facts for your bosses gain? So sad.

Bubba

3:02 pm on Thursday, February 2, 2012

There are proposals to cut $800 million in the budget by cutting health care benefits and reducing the percentage paid into the pension system.

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JustABill

4:13 am on Friday, February 3, 2012

Wow a whole $800 million cut from a budget that is already $32 billion and increased more than double the amount allegedly cut. So how exactly do you cut $800 million from a budget and still have an increase?

I feel a tremor in the Force again. (waves hand from left to right) ... This is a budget cut ... These are not the droids you're looking for ... Move along. Move along.

jnrentz1

4:20 am on Friday, February 3, 2012

Is it appropriate for the Maryland Legislature to appropriate money to religious charities and groups such as Casa de Maryland?

What do you think?

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jnrentz1

3:39 am on Saturday, February 4, 2012

Some tax payers say that State money, that is tax revenues, should not be expended on people that are not supposed to be in America or Maryland in the first place.

jag

10:13 am on Friday, February 3, 2012

Right, the point is that the math (as you laid it out) doesn't make sense. 3.55 x .07 /= $4+ gas.

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JustABill

2:48 am on Saturday, February 4, 2012

$3.55 + .23 x 1.07 = $4.04

That math is quite simple. The .23 is the current gas tax that is added into the per gallon price before the new sales tax will be added. The math gets even more complicated when you add in the Governor's proposed gas tax increase that has been quoted as being between $.15 - .23 per gallon more than the current .23 and as of now that tax increase has not been taken off the table. Defend it all you wish but in this economy any increase in the per gallon price of gas will certainly have a drastic affect on everyone in Maryland but especially the poor and working class. As we have already seen how the current increases in the price of gas has caused an increase in every day necessities such as groceries. Liberals always forget that a tax on businesses or a tax on everyone that will include businesses will ultimately be paid for by the people they claim to serve. These taxes will end up hurting all of the citizens of Maryland far more than they will ever provide for them.

Bubba

3:34 pm on Monday, February 6, 2012

JustABill - the .23 gas tax is already included in the $3.55. And, there are no other proposals to increase gas tax other than the added sales tax. Originally O'Malley had proposed increasing the gas tax, but opted to levy a gas tax instead.

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jag

4:58 pm on Monday, February 6, 2012

Thanks, Bubba. I didn't check back to see how he managed to mess it up. Hopefully he gets it now.

JustABill - with 3.55 gas, getting rid of the sales tax exemption would mean it'd cost 7 cents extra, per year, for 3 years (unless there's a spike in gas prices). If 7 cents per gallon is a burden then I might suggest you shouldn't be wasting money on a car in the first place.

Bill

2:05 pm on Wednesday, February 8, 2012

I am glad this has happened. We live on the Maryland/Pennsylvania border. A short hop to get cheaper gas there. Now all of those O'Malley supportes in the big cities can pay for their mistake. Wait until the cell phone tax increases.

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jag

2:13 pm on Wednesday, February 8, 2012

Except Penn. gas is more expensive than MD gas.... I guess it's possible that whatever rural place you live happens to have an outlier expensive MD station or a outlier cheap Penn station nearby. Don't worry us big city folk are always paying for the infrastructure of the rural folk - we don't mind. Cheers.

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Bob

9:02 pm on Sunday, June 24, 2012

Guess again, MD gas is more expensive. How did you come up with that one, jag? I guess you seem to make up Things too. Keep trying. Gas in Hanover is .22 cents cheaper than here. Gas in York is .20 cents cheaper, so I'm not sure where you pulled that from? Even in Delaware gas is cheaper. Want to talk about Elkton versus Newark, De? How about Fairfax versus Gaithersburg? Your stories are exactly that, stories.

Scott K.

4:37 pm on Wednesday, February 8, 2012

Comptroller Peter Franchot said it best. He calls raising Maryland tax on gas a 'crushing blow’ to families and small businesses. All that these increased taxes do is encourage people to spend their money outside the state. For example, when the state passed the $2/pack tax on cigarettes in 2009, did 25% of smokers just suddenly stop smoking? Nope, not at all. Then why has the amount of profit generated by exceptional tobacco taxes been much smaller than the government expected? If you take a look at a map it's simple -- Maryland is a small state, and all of the bordering states had lower taxes on tobacco. Smokers went elsewhere to purchase their products and Maryland lost out on 100% of the taxes from those users. Same thing happened with alcohol (remember the alcohol tax last July?), and I predict, will happen with gasoline too.

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The Big Egg

5:08 pm on Wednesday, February 8, 2012

Gas prices go up and down by $0.50 to $1.00 during a year. How can you say that this tax would deal a crushing blow when we have endured more pronounced increases without being crushed?

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Scott K.

5:42 pm on Wednesday, February 8, 2012

@The Big Egg.

Are you speaking for everyone when you say, "we have endured more pronounced increased without being crushed?" This additional tax, ostensibly to be used to refill the coffers of the transportation fund that have been looted for other uses by this governor, is a regressive tax. While it may seem to be an equitable form of taxation because everyone, regardless of income level, pays the same fixed amount. In reality, however, such a tax causes lower-income groups to pay a greater proportion of their income than higher-income groups pay. Here in Montgomery County, well-intentioned advocates of a gasoline tax tout the way it will shift demand away from gas-guzzling SUV's and toward hybrid cars and public transit, but they fail to recognize how it will devastate large groups of lower-income commuters. Others may say, "Regressive taxes are tough. Deal with it." That is easy enough for many in this county to say when they aren't worried about when there next meal is coming from. That is easy enough to say when you can afford the $20,000+ price tag that goes along with a new Toyota Prius or Honda Insight, or even a newer, more fuel-efficient car That is easy enough to say when you live in an urban environment when you already have access to public transportation. But when you're not lucky enough to have these advantages, a regressive gasoline tax can be devastating to your ability to simply survive.

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The Big Egg

6:04 pm on Wednesday, February 8, 2012

Scott K.: "Are you speaking for everyone when you say, "we have endured more pronounced increased without being crushed?" "

Are you still driving?

I'm opposed to increased taxes as much as the next person. And, I really hate the Montgomery County bag tax because it is precisely designed to change my behavior. But, I'm also against over-stating impacts. When the price of gas went from $3.00 to $4.00, we all adapted and survived. An additional $0.18 isn't going to kill us. Just p!ss us off. Hopefully to the point where we can get some diversity in our representatives.

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Scott K.

6:35 pm on Wednesday, February 8, 2012

@Big Egg, yes we are still driving, and I am fortunate and blessed that the fuel increases did not negatively affect our family life very much. However I know that not everyone is so fortunate. Also, if this tax was truly going to improve the Chesapeake Bay watershed, perhaps I could get behind it, but there is no guarantee that O'Malley won't loot the fund next year to pay for some new hair-brained scheme of his.

I agree with you completely regarding the bag tax, which to me is another regressive tax imposed by the county, which you so rightly pointed out, is to change behavior and pi$$ everyone off. You are right when you say that we need diversity in our representatives.

The next state election will be interesting as the county is now broken up into three unmanageable districts. My new district, District 6, is joined with Garrett, Allegany and Washington counties, along with a part of Frederick county. Ridiculous. Guess I will just buy more gasoline when in Virginia (or Delaware, PA, etc.) along with alcohol and other "sinful" items (as deemed by the Maryland Nannies, er... legislators in Annapolis) whilst traveling.

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jnrentz1

8:08 pm on Wednesday, February 8, 2012

Every time I see a Prius, which is often in Montgomery County, I visualize an unemployed American auto worker.

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Corbin Dallas Multipass

6:04 am on Thursday, February 9, 2012

So every other Asian or European car gets a free pass, just the ones built on hybrid battery technologies are the ones keeping American auto workers unemployed? Because I'm guessing you see a lot more BMW, Audi, Porsche, and Lexus vehicles in MoCo than Prius vehicles.

You could say the same thing for a 1983 Cadillac someone is still driving since they're not buying a new American car to replace it.

Also, it's not like Toyota doesn't employ Americans to make the Prius, just like all their other brands: http://green.blogs.nytimes.com/2008/10/13/prius-diary-part-vi-made-in-america/

jnrentz1

8:52 am on Thursday, February 9, 2012

Buy American:

The job you save, may be your own.

The country you support may be your own.

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The Big Egg

9:17 am on Thursday, February 9, 2012

This gets confusing. Should I buy the Chevy Camaro made in Canada, Crysler's PT Cruiser made in Mexico, Mercedes build in Alabama, or BMWs built in South Carolina? Apparently more Hondas are made in the US than in Japan. So confusing.

William Woodcock

7:09 pm on Sunday, June 10, 2012

Tax and Spend O'Malley is running from Maryland and heading for Washington, DC (federal Office or Appointment).
Pay no attention to what he's doing, it's the guy behind the curtain we should be watching.

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ICBugz

5:23 pm on Tuesday, June 12, 2012

I look at all the math, I am just tax tired. There is no end in sight and yet my household income with downsizing shifts has the year 2002 looking like our best income year yet. If I feel this, I worry how those who did not have professional employement with good solid salaries feel? Telling people to buy more economic cars is social class snobbery. I work with people who check their ten year old cars out every day in the parking garage before they drive away. That car is their biggest asset and their only means for reaching work.

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bill marshall

5:05 pm on Wednesday, June 20, 2012

Maryland has more police firefighters educaters and government workers per capita than ever before.

Eliminate some people and see what goes undone.. probably not much...

I say cut back some services,let the drunk drivers pick up trash, let road gangs cut the gass and let juvies wash off graffiti....

Get rid of at leasta third of school administrators andfroll back admin salaries across he boeard for all new hires...

Why do we pay an elementary school principal150k a year and then tie their hands with zero tolerance policies? If he is not qualified to make a decision as to whether midol is narcotic then get a drone in thee for 50k.

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Garb67

5:40 pm on Thursday, June 21, 2012

Haven't checked the exact amount, but it seems to me the stimulus money given to this state was approx.$3 billion. Where did that go and what do we have to show for it other than vote buying? Every time this clown opens his mouth he's telling us to do it for the children. Education will suffer if we don't pass the slots bill (even tho when Erlich tried to get that passed O'malley was against it). Public safety will suffer if we don't pass this tax or that fee. When Glendenning was in, he left a $1B shortfall (after leaving PG Cty about $100 M in the red). Erlich left with a surplus if I remember correctly. Even if there were some unfunded mandates, it wasn't as much as the surplus he left.
While I love the state I have lived in my whole life, I hate the idiots that represent us.
,because all they do is buy votes, not represent the state's best interest. Always coming to us with hat in hand saying do it for the poor children.
When Hoyer was asked on a talk radio program, about the stimulus package in 2008 would he vote for it he said yes. When asked if he would vote for it if 75% of his constituents were against it, he still said yes. That's the kind of representation you want? They could care less about you or your children. They only care about staying in power and paying off the players that can get them elected. Apox on all of their houses.

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Brad Smith

11:17 pm on Thursday, June 21, 2012

@Jag

I'm disgusted that your vote of idiocy would negate mine. I truly cannot believe there is anyone in this state that wants to be taxed more, but where intelligence has limits, stupidity knows no bounds and you have proven me wrong. I don't care if it is for autistic disabled children, I don't want to pay for it no matter what it is.

In case there is a small shred of hope left, try thinking about all of the other current road related taxes that are pissed away the by tyrannical general assembly. We are taxed to death in this state, tolls, fees, tags, license, emissions, existing gas tax which doesn't need to be tied to inflation as it's already 6% of $3.91 gallon or 5% of $4.70 a gallon (since 1991). The state builds a highway it has collected taxes for 3 times over and makes it a toll road (the ICC)? Then there is the speed camera taxation system. The GA continues to do this because they have no one to answer to, no matter what idiotic thing they do they'll continue to hold a super majority in the legislature thanks to people with your mindset.

I need to move to Texas, this is sickening.

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Ron

6:50 pm on Friday, June 22, 2012

This tax and spend mentality is exactly why I left Maryland in 2008 to a state where the overall tax burden is much less.

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Brad Smith

7:20 pm on Friday, June 22, 2012

I wish it were that easy for me.

I guess some people just do not realize that the level of wasteful spending will always rise above the level of taxation. That the go to excuses for taking away liberties or raising taxes will always be for safety or for the kids. It's the same thing that's been happening for hundreds of years. The only way to combat it is to stop being a taxation doormat.

Maryland is #6 on the worst states to retire in list, because of the raping the government gives us financially. If you really take the time to think about all of the things they generate income from it's nuts. And don't forget about the income tax, of which we have 3 of the richest counties in the entire country in our state that are having that income taxed and fed into the general fund.

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