September 20, 2007
FOR IMMEDIATE RELEASE
Contact:
William Burns, Director of Communications
(410) 269-0642, (301) 261-2858 | Cell: (410) 733-9945

Business Coalition Releases Tax Study

Annapolis, MD (September 20, 2007) - In an unprecedented collaborative effort, a coalition of Maryland business organizations today released a study analyzing the economic and fiscal impacts of tax policy options being discussed by state policy makers as they deal with Maryland’s $1.5 billion structural budget deficit. 

Participating organizations include the American Council of Engineering Companies / Maryland, Greater Baltimore Committee, Greater Washington Board of Trade, Maryland Association of CPAs, Maryland Bankers Association, Maryland Chamber of Commerce. Local chambers participating include: Baltimore-Washington Corridor, Baltimore County, Cecil County, Frederick County, Garrett County, Greater Silver Spring, Greater Bethesda/Chevy Chase, Hagerstown/Washington County, Harford County, Howard County, Montgomery County, Prince George’s County, Queen Anne's County, St. Mary’s County, Talbot County and West Anne Arundel County. 

The study was conducted by Ernst & Young's Quantitative Economics and Statistics Practice. It focuses the impact of a sales tax rate increase, expansion of the sales tax to services, and corporate and personal income tax changes. 

"Fiscal notes for these tax increase proposals rarely pinpoint the economic impact of tax increases on the retention or recruitment of jobs in Maryland," said Kathy Snyder, President/CEO of the Maryland Chamber of Commerce. "Knowing how each kind of tax would impact the economy would help guide legislators and the Administration in their decision making.”

Key findings of the study include:

• Maryland businesses will pay a significant share of the increased taxes under most of the options evaluated. Business would pay 40 percent of a sales tax rate increase, 79 percent of a sales tax expansion to professional services, and as high as 33 percent of adding a 6 percent top individual tax rate bracket.

• Changes to corporate taxation have the highest cost of all the policy options in number of jobs lost per $1 million of tax revenue raised.

• The incidence of jobs losses across the sectors of the economy varies. A comparison of the corporate income tax rate change and the sales tax rate change shows that the corporate income tax increase results in a larger share of jobs losses in higher-paying occupations.

Download the Study

The Maryland Chamber of Commerce is a non-profit coalition of 840 businesses who employ more than 422,000 people in the state. Its mission is to maximize opportunities for its members and their employees to grow and prosper. For more information about the Chamber, visit its website, www.mdchamber.org or call (410) 269-0642 or (301) 261-2858.

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