The Tax-Exodus Bogeyman

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Many currently do not. According to the state comptroller, nearly half of major companies doing business in Maryland -- 64 of the top 132 -- paid no state corporate income taxes whatsoever in 2005. Zero. The "combined reporting" reform that O'Malley supports would significantly cut down on this tax avoidance.

Will large companies flee Maryland if this reform becomes law? Don't be silly. The national companies currently playing games with Maryland's existing tax law are not going anywhere. Twenty-one states have adopted "combined reporting," and not one of them has experienced a corporate exodus.

Maryland's working families, unlike our wealthy, don't have the luxury of making idle threats. They cannot afford to move on a whim, and everybody knows that. If the threats of the wealthy are taken seriously and they are let off the hook, however, working families will bear the overwhelming bulk of the burden for putting the state's fiscal house in order.

In fact, the governor's revenue plan, even with its tax reforms, already places too much of a burden on working families. The sales tax hike and slots legalization the governor is proposing will hit our state's low- and middle-income families hardest.

The fearmongers will no doubt continue trying to scare us. In the days ahead, lawmakers will be under enormous pressure to deep-six the governor's progressive proposals and simply rely on approaches -- on sales tax and slots -- that essentially give the rich a free pass.

Average Marylanders, in response, also need to exert pressure. If the wealthiest among us are not going to be asked to pay their fair share, those of us with modest incomes -- and their elected representatives -- should withhold support from any legislative package that purports to "solve" the budget shortfall.

That's hardball, and Maryland's working and middle-income families need to start playing. Big corporations and wealthy taxpayers -- almost all of them major campaign contributors -- don't deserve any more preferential treatment. And they certainly don't need the protection of our state's elected leaders.

-- Paul G. Pinsky

University Park