Welcome to Delaware sign which promotes their sales-tax-free shopping. Some Marylanders are telling their elected public servants that they'll hop to adjacent states to buy their goods if the state raises sales and use taxes once again. (Photo: jimmywayne via Flickr, Licensed under Creative Commons Attribution)
(August 03, 2011)—In response to our story yesterday that the Maryland Budget and Tax Policy Institute was recommending $2.6 billion in new taxes, Del. Ron George of Annapolis, a conservative Republican, sent us a sample of the kind of e-mails he gets from constituents.
Contrary to what institute director Neil Bergsman said, these folks say they will move out of state or at least shop there if taxes go up again.
“Ron, you need to understand cause and effect,” said Bill in Annapolis. “If you raise the gas and alcohol taxes, I will simply drive to VA or Delaware to buy. Those items are already less expensive there, but not by that much to make it worthwhile. Your tax increase will result in LESS revenue. I don’t think there is any point in Maryland for which one can be in VA or Delaware in less than 1 hour.”
“I use to travel to VA every week, and I have seen people in cars with MD license plates pull into gas stations and drug store and buy 6-8 cartons of cigarettes at a time due to the lower prices there. It will happen for alcohol also if you increase the tax!”
This e-mail was sent before the increase in the alcohol tax passed. And those folks with the cigarettes better watch out for Comptroller Peter Franchot’s tobacco police, who confiscated 181,000 packs of out-of-state cigarettes last year ($1 million) mostly in large quantities.
My wife is pushing me into Delaware
“I trust you’re not in favor of and will vote against these ludicrous tax increases proposed by the governor?” said Chuck. “The priority should be examining spending. Decrease the rate of spending by a reasonable degree and keep the people in Maryland. I love Annapolis and the bay, however, my wife is pushing me into DE. She says we only have to reside there for six months and one day and we can still have a place in Annapolis.”
“I’ll make all my commodity purchases in Delaware and while I’m there I’ll eat lunch and then slide over to PA and buy my alcohol - beer… and I don’t smoke,” constituent George says. “I’ll get a full tank of gas too – because the tax in Delaware is slightly less than Maryland. Perfect, no tax money to Maryland!”
“Maryland does not provide any of these neighboring state residents any incentives to come into Maryland and do the same, as when the sales tax was 5%. In fact, I would imagine the neighboring state town businesses will have to hire more people because of the increase in business from rebellious Marylanders.”
“I’m retired and play golf, so this can work when I play a course in Delaware.
Do things really cost less in Delaware? They have a gross receipts tax of 6% the consumer never sees, so I wonder if it’s true.”
“I am against Governor O’Malley’s new ‘provider tax’ on hospitals,” says N.L. from Annapolis. “I am against increasing taxes, fees, and assessments on MD citizens and business. I am for cutting city, county and state payrolls and benefits.”
“If we citizens have to live through a recession by cutting our expenditures, then I want to see government cutting their expenditures, not expanding them.”
“If the state of MD keeps raising my taxes and lowering my standard of living, I will move out of state, and you will lose all the tax revenue from my (high) income.”
“We receive emails from former constituents who are now in Va, or FLA or elsewhere reminding us of why they moved,” said Del. George’s aide, Debbie Yatsuk.
This is anecdotal stuff. But there is concrete data, though several years old, showing that while Maryland’s international population is growing, there is net outmigration “linked to decreasing relative economic vitality and higher housing prices,” according to the state Department of Planning.
There is also a dispute about what caused the decline in the number of millionaires filing taxes in Maryland – the decline in the overall economy, as Bergsman suggests, or the surcharge on million-dollar incomes, as some CPAs say.