Ehrlich Pledges To Lower Sales Tax And Halt Tax’s Expansion To More Goods & Services

Regressive Tax Disproportionately Hurts Low Income Families and Small Businesses

DUNDALK -- Bob Ehrlich met with Baltimore County families today to discuss the need to roll back Governor Martin O’Malley’s 20% increase in the sales tax in order to boost Maryland’s economy. He also pledged that he would oppose any effort in the legislature to expand the tax to new goods and services. Maryland lawmakers recently considered expanding the sales tax to 43 new services, including cell phones, gym memberships, and tax preparation.

“Leading an economic recovery in Maryland is my top priority,” Ehrlich said. “To reach that goal, we have to lower the tax burden on families and small businesses. By raising taxes on the eve of a recession in 2007, Governor O’Malley siphoned sorely-needed dollars from families who are now more likely to shop in neighboring states that have lower sales taxes. If I’m elected Governor, I’ll cut the sales tax to encourage more shopping here in Maryland and I will oppose any effort in the legislature to extend this regressive tax to more goods and services.”

Governor O’Malley’s 20% increase in the sales tax is a classic regressive tax increase. For instance, the tax increase has twice the economic impact on an individual making $20,000 as it does an individual making $70,000, according to Maryland legislative analysts. Further, the nonpartisan Tax Foundation has testified that, “in Maryland's case, a reduction in sales tax can serve as a possible first step toward improving the state's business tax climate.”

Ehrlich convened this latest in a series of roughly three dozen roundtable discussions to lay out his vision for making Maryland more business friendly while lessening the burden on taxpayers. He has talked to small business owners and consumers all across Maryland, working to create more jobs and lower taxes.