The Baltimore Sun

Internet tax break costs state millions

Jay Hancock's column "What's behind shortfall in state's taxes? Try smuggling" (Sept. 3) touched on an important tax policy issue facing state governments across the nation and in Maryland.

For several years, Congress has debated the application of state sales taxes on goods purchased via the Internet. Unfortunately, little action has resulted from this debate.

National estimates indicate that states will lose $21 billion to $34 billion in uncollected taxes for purchases made over the Internet that are exempt from state sales tax.

For Maryland, collecting sales tax on all Internet purchases could yield revenue increases in the hundreds of millions of dollars, money the state sorely needs to bring its budget into balance given the lagging condition of our economy and continued structural deficit.

More important, such a policy change would level a slanted playing field for bricks-and-mortar retailers that invest in our local communities and currently charge and pay taxes on their Internet sales.

The effects of this situation are more profound than the 6 percent cost differential for Internet sales subject to state tax vs. those exempt from the tax. They also include sales tax compliance costs that industry experts estimate to be approximately 3 percent of the purchase price.

In essence, under the current policy, local retailers are penalized for paying their share of the state sales tax obligation and helping to make our communities more vibrant.

In 2004, the General Assembly passed the Streamline Sales and Use Tax Agreement, which would make all retail sales subject to state sales tax, contingent upon federal action allowing all Internet sales to be taxed.

Regrettably, as Mr. Hancock states, congressional action isn't likely to happen soon.

Ian C. Kelly, Calverton

The writer is the Maryland governmental relations chairman of the International Council of Shopping Centers.

Regional regimes could curb costs

The state comptroller has now sounded another alarm on the sad state of the economy, and suggests an overhaul of state finances here in Maryland ("State raises limit on debt," Sept. 9). How about a state-mandated overhaul of local government?

Even assuming that the coming slots referendum passes, addressing the structural defects inherent in duplicative local governments should be a top priority of the legislature.

Why, for instance, does the state authorize, fund and subsidize five local police, fire, public works and court systems in the Baltimore metropolitan area? Who can afford that kind of waste in the face of declining state revenues?

County and city governments need to give way to right-sized regional governments that serve the public at a reduced cost.

Until the legislature decides to get serious about its funding priorities by making efforts to streamline wasteful, duplicative government structures, I am one taxpayer who will not support slots or tax increases.

Carl Hyman, Baltimore

Media still swoon for Senator Obama

On Sept. 4, Rasmussen polling reported that over half of U.S. voters (51 percent) think reporters are trying to hurt Alaska Gov. Sarah Palin with their news coverage.

On Sept. 8, MSNBC announced the replacement of Keith Olbermann and Chris Matthews as co-anchors of political coverage because of their liberal political bias.

On Sept. 9, The Baltimore Sun ran an editorial informing the great unwashed that "blaming the media is an old Republican ploy" ("The straitjacket express," Sept. 9).

The enlightened editorial goes on to say that Sen. John McCain is "working off a script from a Karl Rove protege" and that he's "into attack mode."

Like the editorial board, I simply cannot understand why the teeming masses yearning to breathe free believe the press is in the tank for that most liberal half-term senator, the Dalibama, Sen. Barack Obama.

Terrence H. Scout, Chestertown

What if Palin were at top of the ticket?

Here is something to think about for a moment: If Alaska Gov. Sarah Palin were running for president, would you vote for her?

If Sen. John McCain wins, she will be only a heartbeat away.

Gene Berger, Owings Mills

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