Affluent Potomac not amused by plan to redistribute taxes

THE BALTIMORE SUN

POTOMAC -- The view from Mitch and Bill's Exxon in these days of economic distress includes an occasional hint of trouble in this wealthy enclave, the telling of a worrisome tale usually involving exotic cars.

When the Jaguars and the BMWs and the Ferraris pull in to fill up, the driver is likely to be Ted Koppel or Sugar Ray Leonard or the actress Linda Carter or Arnold Schwarzenegger or a big-time Capitol Hill lobbyist.

Under a proposal still pending in Annapolis, automobiles would be hit with a 2 percent personal property tax. For the cars driven by these celebrities -- Mr. Koppel drives a fire-engine-red Mercedes 500, according to station owner Mike Mitchell -- that tax would be hefty.

Incomes would be more heavily tapped as well. A large share of the new revenue -- as much as 80 cents on every dollar collected -- would flow to the state's poorer jurisdictions.

Many in Montgomery County are not happy about that prospect. Letters to local newspapers and legislators express considerable resentment about the taxes county residents already pay, and anger that they're being asked to pay more.

From the run of famous and nameless customers calling at Mitch and Bill's, the odd, revealing story will be told to Mr. Mitchell, son of the station's founder -- the first Mitch, a man who became a millionaire pumping gas for the swells.

Mr. Mitchell said 25 houses on the market in Potomac for $1 million or more hadn't sold. And the concessions allegedly offered to move such houses have been remarkable.

"There was one where they lowered the $2 million asking price and threw in a Bentley to promote some action," he said.

In most parts of the United States, a house may be sold with the washer and dryer. Potomac sellers offer Godiva-level sweeteners.

The house sold eventually, Mr. Mitchell heard, but the Bentley was not part of the deal. The buyer already had one of those cars.

A bearded Mike Mitchell, just turning 40, held court in a station office decorated with five small U.S. flags, a blue marlin caught in Acapulco, Mexico, by his father, a sign that says mechanics earn $48 an hour at his station and Exxon plaques honoring "Mitch and Bill" for their efficiency.

Mr. Mitchell no longer maintains "house bills" -- credit for regular customers -- nor does he cash checks. But he provides all manner of services not always available in the modern world of self-service, booth-protected gas stations. In cases of heavy snow, his "refueling technicians" have undertaken emergency runs to doctor appointments and to the sites of the SAT examinations for college.

While Mr. Mitchell talked, a 17-year-old student, wearing a green Bullis School jacket from that preparatory academy, pulled up to put a little air in the tires of the white Porsche she was driving.

Upon such stories and images is the myth of Potomac (and of Montgomery County) built and burnished. Upon such details do the political wolves of Annapolis whet their appetites.

If Montgomery County is the state tax collector's primary target in Maryland, Potomac is almost certainly ground zero. According to a new breed of those who want Montgomery to come first -- led by developer and political columnist Blair Lee IV and others -- the county has been a rich source of revenue because the residents were so politically liberal, so generous -- so focused on Washington and the world -- they even assisted in the plundering of their own purse.

It is a measure of Montgomery's wealth and its position as an economic engine of the state that its county government faces a deficit of $175 million -- a sum equal to 41 percent of the entire state's current-year shortfall of $423 million.

Much has changed in the county since 1949, when Mr. Mitchell's father and his partner, Bill Shoemaker, took over a small filling station at the corner of Falls and River roads, now about three miles north of the Capital Beltway.

Then an isolated, rural redoubt enjoyed by a handful of the adventurous, it has turned into something like Beverly Hills East, Mr. Mitchell suggested. Women do their grocery shopping in jodhpurs, it is said. A bran muffin -- decidedly small -- can set you back $1.35.

Let the record show, however, that not everyone finds the stories about Potomac's wealth so amusing or even accurate.

The kid in the Porsche, for example.

"It's not her car. It's her mother's. She drives a Rabbit," said one of Mr. Mitchell's young attendants.

More to the point, says Delegate Richard La Vay, R-Montgomery, a third of the county's residents earn less than $20,000 a year. For the elderly, he insists, the array of potential tax increases now under consideration in Annapolis could be devastating. For newcomers, the high cost of housing adds a degree of economic stress not felt in other parts of the state, he says.

Those factors need to be considered, he says.

Having knocked on 11,000 doors during last year's campaign, Mr. La Vay senses a mood bordering on desperation. "They think government has a certain insouciance about spending. They think it's out of control," he said.

Though accused of being distracted by Washington, he says, voters see that the state has named a commission to study raising taxes -- but none to study the real problem, spending.

The county clearly has needs -- closing its $175 million budget gap for example, and providing new schools for the children of the many newcomers.

A recent poll by Mason-Dixon Opinion Research of Columbia shows that the state's proposed new 5 percent sales tax on gasoline is favored by 55 percent of Montgomery countians who spend hours each day on the car-choked highways.

"I would favor $3- or a $4-per-gallon gasoline," said Raymond E. Hengren, 87, a longtime customer of Mitch and Bill's -- whose proprietors now oppose the tax. A retired Federal Deposit Insurance Corp. bank examiner, Mr. Hengren said a higher tax on gasoline was a "damn good idea."

"It would do a lot to solve the energy problem," he said. "It could get some of these people off the road."

If the senators and delegates from this area are correct in contending that Montgomery is tired of lifting the state's tax load, it is also true that the generous old impulses die slowly.

Asked whether he thought the state was taking advantage of him and his neighbors, he paused a moment. He said he always remembers what a colleague in the South told him years ago: "Ain't no use puttin' your hand in a poor man's pocket."

Unlike many of his neighbors, Mr. Hengren is generally in favor of the tax restructuring proposal offered by Montgomery County and Washington lawyer, R. Robert Linowes, a proposal that would raise an estimated $800 million in the first year. Fairness, Mr. Hengren says, demands change. For the young woman who comes in to help him clean occasionally, he dutifully fills out the Social Security tax forms -- a revelation, he says.

"When I figure out the tax on this poor soul and I think what most of the people around me are able to do to avoid taxes, I think it's a hell of a way to run a country," he said.

He is not in the majority, it would appear. The Mason-Dixon poll shows little support in the state for most of the Linowes proposals.

The tax on automobiles and boats has a certain level of support in Baltimore and Prince George's County, but increases in income and sales taxes are almost universally rejected.

Last week, perhaps in response to the continuing lack of interest in the Linowes plan, the Schaefer administration said it might pursue something more modest -- a still unformed package of levies designed to raise $200 million in the coming fiscal year.

Almost any approach would rely on the deep pockets of Potomac.

The local newspaper reporter observed that Annapolis and the county seat in Rockville faced a difficult chore: They had to overcome the palpable anger that unseated a strong Montgomery County executive in last November's election and put a cap on property taxes in the county.

What if the residents of Potomac do drive fancy cars? asked Mr. Mitchell. Who thinks anyone, rich or poor, has more money for the government?

"I think everyone lives pretty much up to their income level, don't you?" he said.

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