Virginia keeps tax rates steady, Maryland raises them. Guess which one’s in surplus first?

Jim Geraghty at National Review Online brings us an interesting contrast between the two states that border Washington, D.C.:

Just days after Virginia Gov. Bob McDonnell announced a $544 million surplus, Maryland Gov. Martin O’Malley told county leaders Saturday that Maryland may need to increase taxes to solve a $1 billion budget gap next year.

What makes the contrast even more striking is the fact that McDonnell previously balanced an inherited $4.2 billion budget deficit that then Gov. Tim Kaine said could only be closed with a $2 billion tax increase while O’Malley has already signed the largest tax increase in Maryland history during his first term.

Both states benefit from the hiring spree and rare layoffs in the federal government, but the unemployment rate in Virginia is 6.1 percent while the unemployment rate in Maryland is 7.2 percent. (links original)

O’Malley made a direct comparison between his approach and that of the “obstructionist, economic saboteurs in Congress.” Given the results of his tax-hikes-begetting-tax-hikes approach to budget deficits — which yielded a flood of millionaires leaving the state — I don’t think he’s going to win that contest.

Btw, Politifact Georgia today rated “true” a statement that the proposed transportation sales tax, created by Georgia’s Republican-controlled Legislature and endorsed by its Republican governor, could be the largest tax hike in our state’s history.

– By Kyle Wingfield

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108 comments Add your comment

Jefferson

August 22nd, 2011
11:52 am

This does not prove a single thing.

that's goofy

August 22nd, 2011
12:04 pm

and in other news: an orange is more orange than an apple.

carlosgvv

August 22nd, 2011
12:11 pm

“a flood of millioniars leaving the state”

It must be nice to have that kind of money so that, when you are asked to pay your fair share of taxes, you can just up an move to a more “conservative” State.

resno2

August 22nd, 2011
12:15 pm

‘when you are asked to pay your fair share of taxes’

How much is their fair share?

hsn

August 22nd, 2011
12:16 pm

We need need BOTH tax hikes and lower spending to quickly close in on the national debt.
Forget the talking points.

If only tax reduction worked so well, why did Reagan have to raise the debt ceiling 17 times? Huh?? .. and the problems he inherited were not even close to this GLOBAL scale.

Can you imagine Obama requesting a debt ceiling increase even 2 times in a time of global economic crises and multiple wars?? You cons will put your interests above everything else, even if it means the country’s downfall. You are a collective disgraceful fools!

that's goofy

August 22nd, 2011
12:23 pm

c’mon Kylie – you can do better than this. All you did was comment on an article by some guy that looks like Eddie Munster.

How about some research? I think it was called “journalism” before 24 hr news and talk radio.

Is there a difference in income tax and deductions? How about sales tax? Is one state more generous to corporations? Property tax? Maybe unemployment should be factored in as well?

Jefferson

August 22nd, 2011
12:24 pm

How will Georgia balance its budget with the cuts from the feds and the debt of close to 700 million to the fed for unemployment where they gave employers an insurance premium holiday?

JDW

August 22nd, 2011
12:27 pm

Not a lot of meat here Kyle.

BTW did you know that even with the rate increase Virgina still has higher income taxes than Maryland. In MD you pay 4.75% on income over $3K but less than $150K. Then you get hit at 5.5%. In VA you pay 5% over 5K then 5.75% over $17K. So a guy making $250K in MD pays about $9900 and in VA the same guy pays $13,775. Thats 39% MORE IN VA.

I guess your point is that if taxes are at the right level you don’t need to raise them.

retired early

August 22nd, 2011
12:31 pm

Kyle

The transportation sales tax would be the “largest tax increase in state history”.
So, where do we get the money to pay for our roads and bridges when the “motor fuel tax”, the lowest in the nation, is insufficient to “Keep up” with needed improvements. What better way than a “consumption tax”, paid by all the people who benefit from the improvements. What the hell is wrong with that…oh, it’s a “TAX INCREASE”!!! From your logic, we need to dismantle all government and let each person be responsible the portion of road that runs in front of their house, then you can simply carry a gun…no need for the law, and if your house burns down…oh wait, we already pay for our individual fire protection. People living along the borders will just have to do more patrols to stop the illegals from invading…and certainly we can do without the military…once we get out of these wars…no problem there. Social security, hell, old people starved to death for years without it , we can go back to those good old days again. I can hear that GOP theme song..”only the strong survive…only the strong survive”.

JDW

August 22nd, 2011
12:41 pm

@Retired Early…”I can hear that GOP theme song..”only the strong survive…only the strong survive”.”

That was the theme song but someone pointed out that it had ties to the Theory of Evolution so it just wouldn’t do. So effective in 2009 they switched to “I Got Mine, Now I Am Going To Get Yours Too”.

jconservative

August 22nd, 2011
12:43 pm

:…the largest tax hike in our state’s history.”

Georgia Republicans = former Democrats.

But they have the magic “R” after their name on the ballot.

Speaking of former Democrats, the former Chairman of the Texas “Gore for President” campaign is now campaigning for the Republican presidential nomination.

ragnar danneskjold

August 22nd, 2011
12:59 pm

Good afternoon all. Glad for the “heads up” on the prospective “largest tax increase in Georgia history.” Sounds like a good reason to vote against all who voted for it, without regard to party affiliation.

carlosgvv

August 22nd, 2011
1:05 pm

resno2

How about the same percentage the rest of us common folk pay?

resno2

August 22nd, 2011
1:23 pm

carlosgvv, wouldn’t that have them paying less than they are now?

Figure one of us common folk is making $50,000/year. Their bracket is, what? 25%? Now take one of those mean and nasty millionaires. Their bracket is 35%. I’m sure they’d love to pay the same percentage that we are.

Mark in mid-town

August 22nd, 2011
1:25 pm

to JDW at 12:27. You don’t know what you’re talking about. Maryland also has substantial income tax levied at the county level in addition to the state rate, rendering your comparison meaningless. Overall tax rates are higher in Maryland than Virginia.

buck@gon

August 22nd, 2011
1:32 pm

“Given the results of his tax-hikes-begetting-tax-hikes approach to budget deficits …”

Kyle,

This is good writing!

Unfortunately, the secret that big government begets bigger government is well-kept by the mainstream media and does not register with the general public not baptized in substantive Tea Party lingo. These days, such truths will always be smothered with coverage of “ultra-right wing,” “racism,” “creationism,” “operation Rescue,” “paying THEIR fair share,” and stories about Ronald Reagan supposedly hugging trees.

When a Republican President assumes power, suddenly, the news is atwitter about homelessness and unemployment. Bring out the victims!

Actually Kyle, I think such absurdities are multiplying in the age of Obama. For instance, when Obama claims to be focusing on the economy, he’s really talking about focusing on it. When he’s talking about healthcare, he’s talking about talking about it.

buck@gon

August 22nd, 2011
1:38 pm

retired early,

Like that social security? Unfortunately, all those transfer payments going so that you and the Mrs., can hobnob around the country in your RV to see your grandkids all year, is weakening the country and ennervating the population. Not only are only the strong surviving, the strong are paying for everyone else, and there are fewer and fewer of them.

Heard of Greece, Spain, the UK?

The reality of the most in-debt nation in the history of the world is that someone is going to have to pay the bills eventually. Don’t believe me?

Stick around. Have kids and burden them with your debt. See what happens when we leave our borders open to the only people as a block who are extremely willing to work–uneducated people who don’t even speak the language. Where are the jobs going to go, and who’s going to have money to buy the things made by China and India?

JDW

August 22nd, 2011
1:47 pm

HORSE HOOHEY….Tell it to the people with the data. According to the Institute on Taxation & Economic Policy:

Income Percentile MD Total Effective Rate VA Total Effective Rate
0-20 9.90% 8.90%
21-40 10.00%8.50%
41-60
9.80%
8.80%
61-80
9.00%
8.90%
81-95
7.90%
8.50%
96-99
8.00%
7.80%
Top 1
6.20%
6.30%

As you can see the big difference is VA taxes higher income levels at a higher rate that MD…now where have I heard that idea before?

http://www.itepnet.org/whopays3.pdf

JDW

August 22nd, 2011
1:49 pm

OPPS that was scrambled

PTL MD VA
0-20 9.90% 8.90%
21-40 10.00% 8.50%
41-60 9.80% 8.80%
61-80 9.00% 8.90%
81-95 7.90% 8.50%
96-99 8.00% 7.80%
Top 1 6.20% 6.30%

@@

August 22nd, 2011
1:49 pm

I like McDonnell. Perhaps he’ll run for President one day. A pleasant politician focused on resolving problems, not creating more.

JDW

August 22nd, 2011
1:54 pm

@buck@gon “Unfortunately, all those transfer payments going so that you and the Mrs., can hobnob around the country in your RV to see your grandkids all year, is weakening the country and ennervating the population.”

Guess you missed the part where retirees have invested into that system for thier entire lives and are now drawing out THIER OWN MONEY. Now the bit that the Repugnicans have piSSed away on tax breaks for the wealthy, wars that needn’t have been, and defense spending that now exceeds the remainder of the world COMBINED…that part is is weakening the country and ennervating the population.

Dave R.

August 22nd, 2011
1:59 pm

Bottom-line, a $4.2 billion deficit was erased into a $544 million surplus with Republican principles being used, while a $1 billion deficit still looms in a state run on Democrat principles.

No other explanation is needed.

TrishaDishaWarEagle

August 22nd, 2011
2:02 pm

Tax cuts work..always have, always will. What we simply have to do is stop cringing when the left calls it greed. Keeping what you earn is never greed..wanting to have government take from others to give to you because you have a ‘need’ is greed. Turn the tables on them. But in the end, F ‘em..who cares what the left has to say..it’s not like their opinions or even their lives matter to me.

TrishaDishaWarEagle

August 22nd, 2011
2:09 pm

And vote NO on the regional transportation sales tax!

JDW

August 22nd, 2011
2:09 pm

@Dave R…”Bottom-line, a $4.2 billion deficit was erased into a $544 million surplus with Republican principles being used”

And Dave, just what were those principles…keep our already high taxes high until the economy improves? Seems like that is all they did.

Ayn Rant

August 22nd, 2011
2:10 pm

No matter how hard you try, Kyle, you’ll never be able to show that taxes reduce government revenue, and tax reductions increase revenue. What you’re up against is simple arithmetic!

Both Virginia and Maryland are heavily dependent on the federal government; their comparative financial situations vary according to whichever one is sucking hind teat at the moment.

what??

August 22nd, 2011
2:12 pm

Wow…this article is quite a reach.

They maintianed spending at 2006 levels…and kept higher tax rates…

I understand the spending to Republicans but that kinda disproves your mantra of tax cuts doesn’t it.

On a side note, Connecticut has a budget surplus ant they are all D’s in the legislature leadership..does that prove that democratic principles work?

Latoya

August 22nd, 2011
2:23 pm

“…that Maryland may need to increase taxes to solve a $1 billion budget gap next year.”

Maryland’s black hole, no pun intended, is the city of Baltimore.

Baltimore is MD’s Atlanta. Walk around the downtown Baltimore environs (preferably armed and before sundown) and the similarities are striking, urban decay everywhere but diversity in abundance.

carlosgvv

August 22nd, 2011
2:23 pm

resno2

Apparently, you have not considered that the rich can and do hire top-notch lawyers and tax accountants. The net result of this is that, because of tax loopholes especially legislated for them by their lacky politicians, they wind up paying little or no taxes.

saywhat?

August 22nd, 2011
2:29 pm

Kyle, you just got burned by Jim Geraghty from NRO. He didn’t mention the difference between Virginia’s and Maryland’s tax rates, like JDW did.You trusted Jim Geraghty and now he has made you look like a nincompoop. I’m not the only reader who has several times told you that you need to find better reading material. Ignore us though, and continue to get burned by authors who care more about making a non-existent point look real, than exposing actual truth.At least try to force yourself to practice just a little critical thinking and eye what you read (especially at known partisan sites) with just a little skepticism. It will save you from more embarrassing moments like this one.

Misty

August 22nd, 2011
2:38 pm

I get so tired of hearing that “pay their fair share” crap. When the bottom 50% of citizens start paying any income tax at all; we’ll talk. Until then, if a person pays 1$ in income taxes, they have paid more than their fair share.

what??

August 22nd, 2011
2:50 pm

Misty-

Fair share in this argument ws referring to state taxes…which everyone in a state pays(there is no distinction between sales tax and income tax in the states general fund)

Hillbilly D

August 22nd, 2011
3:36 pm

Let’s not forget that income taxes aren’t the only tax that people pay. My guess would be that nearly every Georgian is seeing an increase in property taxes this year. Everybody in my county is and I bet we are far from the exception.

Kyle Wingfield

August 22nd, 2011
3:46 pm

Speaking of “HORSE HOOHEY”…JDW @ 1:49: You didn’t compare apples to apples from your own link.

For Maryland, you listed effective tax rates after a federal offset…for Virginia, you listed rates before the offset.

If we do both after the offset, we get:

PTL MD VA
0-20% 9.9% 8.8%
21-40% 10% 8.4%
41-60% 9.8% 8.4%
61-80% 9% 7.9%
81-95% 7.9% 6.9%
96-99% 8% 6.6%
100% 6.2% 5.2%

The effective tax rates are also uniformly higher in Maryland if we look at the numbers before the offset.

buck@gon

August 22nd, 2011
3:46 pm

Jefferson @ 11:52,

YES, it proves something dramatic, compelling and damning. It shows beyond doubt that liberals will stop at no glaring truth and admit that it exists.

It’s all “racism,” “right-wing/terrorist/creationist extremists,” and “backs of the poor” from now until infinity. Meanwhile the country itself is going broke, in no small part for the “benefit” of the poor and disabled.

Kyle Wingfield

August 22nd, 2011
3:48 pm

Now, what were you saying about getting “burned” by others who make you look like a “nincompoop,” saywhat?

buck@gon

August 22nd, 2011
3:52 pm

Ayn Rant @ 2:10,

Proving via anecdote, history and mathematical modeling are the only ways to PROVE anything concerning taxes. Doing so provides a much more compelling “proof” say, than that global warming, which uses only one off the above, to claim that it #1 exists, and #2 is caused by man-made emissions.

Whether or not you have this proof we will leave aside. What IS more certain is that if you regulate, overregulate, tax and spend future dollars, then you will have less dollars in the future and the nation will be poorer.

Tell that to a liberal, and all you will hear is “backs of the poor” and how conservatives are starving government. It’s like Thomas Sowell said, they are simply pretending that we are talking past each other.

buck@gon

August 22nd, 2011
3:56 pm

“So effective in 2009 they switched to “I Got Mine, Now I Am Going To Get Yours Too”.”

I think that really this is a direct quote from Barack Obama when the mikes are off. When they’re on, it’s “pay their fair share.”

buck@gon

August 22nd, 2011
4:01 pm

Kyle,

I’m sure you also could find (or write!) articles aplenty about Texas’ nonparticipation in this ongoing national recession that would “prove” more of what these liberals don’t want anyone to become aware of. Liberals want it all: high taxes, very big government, rich menu of choice without traditional citizen responsibilities…..and

…oh yeah, NO criticism.

JDW

August 22nd, 2011
4:06 pm

@Kyle, my bad on the offset vs non offset…trying to do too many things at once. That does not render the main point moot however…VA Income Taxes are higher than MD’s and always were…even before they MD increases.

The other bit I notice in the breakdowns is that Virginia’s share of revenue from “non-tax” sources…read taxes described as fees…is about 33% higher than Maryland’s.

The bottom line is that the difference between the two is not recent tax policy but is more related to prior tax policy and the size of the tax base.

buck@gon

August 22nd, 2011
4:18 pm

JDW,

That is EXACTLY the point. You are obfuscating the facts and conflating government revenue with taxes vs. fees. Jay Bookman can’t seem to write and admit that there is any difference. Virginia does make more revenue from fees. I’m willing to bet without looking that Texas’ fees are even higher than Virginia’s. Well, it seems to be working, doesn’t it? Isn’t this great?!! Fees and taxes are very different. It is the reason, for example, that Florida’s economy is doing better than Georgia’s and that FLADOT has lots more construction projects. Ever heard of the Florida turnpike?

What this proves is that specific fees (user fees particularly) are far far better than a big daddy style mafioso federal government that says, “pay your fair share” or we’ll send out the union thugs with no accountability. What’s more is that fees and point-of-sale taxes beget more citizen involvement. If they’re going to build a tollbooth on a road you always travel, and they want to raise fees or sales taxes, everyone is affected by how much they choose to buy. You’re going to care and give your voice to the situation.

In Washington, they’re going to fill everything with bureaucratease and not read anything until they pass it. Oh yeah, and budgets: who needs ‘em? Aren’t I fairly representing Democrat failures and efforts and statements for the last 800 or so days?

If so, try to think clearly next time. Try chewing gum and typing at the same time.

Kyle Wingfield

August 22nd, 2011
4:29 pm

JDW @ 4:06: In the first place, you know as well as I do that tax rates are not the only part of the equation. Deductions and credits also matter, and — again, using your own source — the effective income-tax rate is higher in every income grouping in Maryland (except for the 1-20 percentiles, where it’s 1% in both states).

Second, as Hillbilly D pointed out earlier, income taxes are not the only taxes people pay. So, you were right to look for the total incidence of tax…just wrong to claim it’s higher in Virginia.

Finally, the article I cited in the OP did not talk about raising “income taxes,” just “taxes.”

All of these factors will only have gotten worse in Maryland since the 2007 data your source used. So I don’t think your “bottom line” is correct, either.

Linda

August 22nd, 2011
4:38 pm

buck@gon, I’m sure your great grandparents, grandparents, parents, in-laws, wife, kids, grandchildren, great grandchildren, all your other relatives, neighbors, friends, co-workers, etc. are or will be as proud of you as I am. Wish I could claim you as one of my own.

Linda

August 22nd, 2011
4:39 pm

Kyle, ditto for what I said about buck@gon!

THE "REAL" TRUTH

August 22nd, 2011
4:49 pm

LOL!! Now this is a pick em’ story. Wondering how long Kyle had to look for this and then the length of time it took to feebly attempt to tie it to some missteps by President Obama. Bottom line, tax cuts for the wealthy has done NOTHING for our country overall. The middle class is getting hammered by the loss of jobs, income, healthcare costs, etc. While the rich just keep on getting richer. C’mon, Kyle… we have a NATIONAL PROBLEM, not just a VA and MD problem. Look at the gold dome at the capital, GA is not fairing well and jobs are a thing of the past. Why not write a piece on the Republican plan here in Georgia?

Or are you afraid of what the repercussions would be?

JMM

August 22nd, 2011
4:51 pm

@Ragnar
You’re going to vote against all who voted for the transportation tax? Please be advised that the tax hasn’t actually been voted on. It will be by referendum. The only thing the legislature voted on here was allowing the electorate to vote on this. So you’re opposed to allowing voters to vote on issues? Ok. That’s an interesting notion. I, in the other hand, am still dumbfounded that we require an act of the legislature to allow us to actually vote on anything.

lil "o"

August 22nd, 2011
5:05 pm

…we have a NATIONAL PROBLEM

I agree, I agree, the NATIONAL PROBLEM is Democrat and it begins with the name barack.

Solution 2012!

Mike

August 22nd, 2011
5:05 pm

And Georgia was 50th in job creation in July (that’s 1 spot away from being last). This is a clear example that low taxes don’t automatically mean more jobs…

Guess who was number 1? Yep, Texas and they aren’t afraid to spend the money to build toll roads and rail lines and invest in their infrastructure.

fact check please

August 22nd, 2011
5:09 pm

August 22nd, 2011
5:05 pm

Jefferson

August 22nd, 2011
5:11 pm

buck, you are wrong partner.