In Maryland, your taxes support many of the '1 percent'

According to Occupy Wall Street protesters and Democrats, the Grinch stealing Christmas this season is the collective corpus of bankers, hedge fund managers and other financial-sector bigwigs who don't pay their fair share in taxes.

It's easy to see why. They make perfect scapegoats for unemployed college graduates with lots of debt, big-government liberals and others who want to believe a black-and-white narrative of the country's financial collapse and blame someone.

But protesters and others should hold a mirror up to themselves and check the facts on the "1 percent."

Their stereotype does not hold, especially here. Maryland has the highest percentage of millionaires of any state in the nation, according to the Census, in large part due to the thousands of federal employees with large pensions. It is also the wealthiest state in the nation in terms of household income, due significantly to people who make money off of the federal government as employees or contractors.

Many others earn huge salaries from hospitals and other nonprofits whose main funder is government. In Baltimore City, 33 percent of the private sector is employed in a business designed not to turn a profit, compared to 8.6 percent nationally.

And last week The Baltimore Sun reported that some Baltimore County police officers are retiring with a $500,000 payout — on top of annual pension payments upwards of $150,000 per year. Maryland is not the only place where this is happening. The phenomenon of municipal millionaires is causing financial nightmares for cities across the country who cannot afford the large retirement benefits promised to government employees in better times without cutting core services and raising taxes.

These are the people occupying the top income tiers in Maryland and across the nation and whose benefits ensure they will stay on top for the rest of their lives. Only a tiny fraction of private-sector workers can hope for such income and retirement security.

But don't hold your breath waiting for Occupy Wall Streeters or the state's dominant party to criticize government for making people wealthy.

In their minds, more government is needed to make more people as affluent as those who are already enjoying a great lifestyle at someone else's expense. That is why Gov. Martin O'Malley has been pushing billions more in spending on a federal jobs bill in his role as head of the Democratic Governors Association. It's also why Democrats (and many Republicans) prefer to raise taxes than cut spending or restructure entitlements.

It doesn't matter that the previous stimulus spending didn't work as advertised. Nor does it seem to register that redistribution works only so long as there is money to take from someplace else.

Blaming Wall Street is easier and so much more fun than extirpating the root cause of financial problems plaguing our city and state and those around the country — too much spending.

The other issue is that politicians of both parties don't want justice for Wall Street. As a Sunday "60 Minutes" piece points out, the Obama administration has prosecuted no high-ranking Wall Street executive or financial firm in the last three years. This reprieve exists despite widespread fraud and chronic misrepresentations of "too big to fail" banks' financial health. In fact, prosecutions of financial fraud are at a 20-year low, according to a Syracuse University study cited in the "60 Minutes" report.

Look no further than the special treatment offered to members of Congress by those very same firms and the thousands in campaign donations from their executives to answer why nothing has happened.

So, on one hand, there is willful blindness to the role played by an ever-expanding government in the collapse of local and state finances. On the other, there is an unwillingness to hold those on Wall Street who played a significant role in destroying the country's economy accountable for their actions.

These are not problems solved by making a few people pay higher taxes. They require purging the entitlement mentality at all points of the income spectrum and forcing people to take responsibility for themselves. The problem is finding politicians and Americans — half of whom don't pay federal income taxes but expect to be taken care of — willing to take the prescription.

Marta H. Mossburg is a senior fellow at the Maryland Public Policy Institute. Her column appears regularly in The Baltimore Sun. Her email is martamossburg@gmail.com.

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