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I have lived in the state of Maryland my entire life. I was born and raised in the suburbs near Washington, D.C. and attended college in western Maryland. Now that I have recently received my college diploma, I plan on fleeing to the neighboring and lower-tax state of Virginia as soon as possible. There are plenty of great things about Maryland (see: world famous crabs and the beautiful mountains of western Maryland), but the high taxes are not one of them. It’s time for me to pack up and leave my spendthrift home state.
Maryland is on the brink of fiscal disaster. According to Americans for Tax Reform, “Maryland is speeding down the road to serfdom.” In Noble Prize-winning economist F.A. Hayek’s classic book The Road to Serfdom, he precisely warns us against many of the government policies that Maryland has enacted. The Road to Serfdom was not meant to be a how-to manual. The state has moved in a tyrannical direction that crushes individual freedom and prosperity.
Annapolis has a severe spending problem. General Fund spending in Maryland has increased by 7 percent between 2007 and 2010. Even though the state has one of the highest budget deficits in the nation, politicians have refused to bring spending under control. Public-sector pensions are simply bloated and unsustainable in the long-run. The Maryland Public Policy Institute states that “here in Maryland, the state government pays out over $210 million per month to retired public employees. It’s a staggering number, particularly in light of the state’s equally staggering $1.6 billion budget deficit.”
Raising taxes is never the solution. Yet, Maryland politicians have repeatedly attempted—and failed—to close budget deficits by hiking taxes. The state has hiked alcohol taxes, cigarette taxes and doubled tolls on their bridges and roads. Montgomery County, Maryland has passed a 5-cent bag tax on both paper and plastic bags that kicks in on January 1, 2012. In 2008, the state sales tax increased from 5 percent to 6 percent which is higher than the national average.
Maryland ranks 44th in the Tax Foundation’s State Business Tax Climate Index which factors in five areas of taxation: corporate taxes, individual income tax, sales tax, unemployment insurance taxes and property taxes. All of Maryland’s neighboring states ranked significantly better. States with low or no income taxes attract a great deal of entrepreneurs and productive citizens. Maryland Governor Martin O’Malley raised income tax levels on wealthy households to 6.25 percent from 4.75 percent in 2008. Maryland’s millionaire tax back fired. It is estimated that Maryland lost $1 billion because one-third of wealthy residents moved or filed their taxes in other states with lower tax burdens.
Many Maryland politicians have been bought by powerful unions. The Democrat-controlled state legislature recently passed a law to force state employees to pay union dues even if they do not wish to be a member. This will affect 12,500 government employees who have chosen not to join a union for their own personal reasons. As Americans for Tax Reform says, “the state employee unions donated tens of thousands of dollars to the Maryland Democrat Party and held rallies for the Democrat Governor, O’Malley…With the unions promising to raise hundreds of thousands of dollars for the 2012 elections, this was just a corrupt way for politicians to funnel themselves more money for their campaigns.”
A Mercatus Center study titled “Freedom in the 50 States” ranks Maryland dead last in personal freedom. The state is no friend of school choice. Maryland has burdensome homeschooling laws that require all curricula to be approved by the government. The Mercatus Center states that in Maryland “centralized land-use planning is very advanced, labor regulation is severe, health insurance coverage mandates adds a whopping 50.9 percent to the cost of policies, occupational licensing is much more pervasive than average, and eminent-domain abuses is almost totally unchecked.”
The 2010 census finds that more Americans are migrating from high to low tax states. One great thing about our federalist system is that states are laboratories of democracy. Maryland’s experiment with high taxation and excessive government spending has failed. The state is a clear lesson of what not to do. Unless Maryland immediately shapes up by reducing its tax burden and job-killing regulations, many residents like me are likely to vote with their feet by moving out of the reckless state.