Byline: Tom LoBianco, THE WASHINGTON TIMES
ELLICOTT CITY, Md. - Gov. Martin O'Malley yesterday proposed raising the state's sales tax by 1 cent and expanding it to include health clubs, tanning salons and property-management companies.
The state sales tax would increase from 5 cents on the dollar to 6 cents - placing it in line with Pennsylvania and West Virginia and above Virginia, which charges 5 percent and the District, which charges 5.75 percent.
Delaware does not charge a sales tax, although it charges a gross-receipts tax, similar to a sales tax on business.
"This whole package is going to be a mixed bag," Mr. O'Malley said. "Any one piece, you know, will affect some people more than it affects others. The one piece that will affect all of us is the sales tax."
Mr. O'Malley also proposed cutting the state's property tax 3 cents - to 8.2 cents per $100 of assessed value.
Critics called the rollout of Mr. O'Malley's most important policy to date - his plan for closing the state's $1.5 billion budget deficit - elaborate theater designed to confuse Maryland voters.
"This is O'Malley's Traveling Magic Show," said Senate Minority Whip Allan H. Kittleman, Howard County Republican. "What he's doing with one is hand is he's distracting you and saying look at all these wonderful things ... and with his other hand he's picking your pocket"
Mr. O'Malley, a Democrat, said he hopes to raise a combined $804 million through the penny increase and the expansion of the sales tax, which is considered to be a regressive form of taxation that hits lower income families hardest.
"The sales tax, which by itself, I would agree is regressive," Mr. O'Malley said. "It is not regressive when you consider it in conjunction with a reduction in property taxes and a reduction in income taxes. …