Nation's Largest Taxpayer Group Warns Gov. Ehrlich Against Tax Hikes, Vows Fight in Legislature

3/19/2003

From: John Berthoud, Pete Sepp, or Maureen Tell, all of the National Taxpayers Union, 703-683-5700

ALEXANDRIA, Va., March 19 -- Maryland Governor Bob Ehrlich's turnaround on the state's budget situation drew a blunt warning today from the National Taxpayers Union (NTU): more tax increases could worsen, not solve, deficit problems, and break the trust of taxpayers in the process. The non-partisan citizen group, which has 335,000 members nationwide, has already begun mobilizing its 8,000 members in Maryland against any and all new tax proposals.

"Candidate Bob Ehrlich knew that the citizens of Maryland already face a record tax burden and that it was economically and morally wrong to worsen that burden," said NTU President John Berthoud. "It is unfair to Maryland's voters as well as the state's economy for Governor Bob Ehrlich to now suddenly back away from this solid principle."

Berthoud's comments are supported by his recent study, Solutions to the State's Budget Ills published by the National Taxpayers Union Foundation (NTUF), warning that tax increases are the wrong solution to state budget shortfalls. The study reviews a range of research showing a strong causal relationship between higher taxes and poor economic performance. States which enacted tax hikes during the last budget crisis (in the early 1990s) experienced slower income, employment, and population growth during the ensuing decade, which in turn only fueled the fiscal problems that the new taxes were supposed to cure.

Berthoud said the growing list of additional tax hikes under discussion in the Legislature "ought to show Governor Ehrlich that even cracking open the door to higher taxes will only start a stampede he'll find difficult to control." On top of the Governor's property and business tax hikes, lawmakers have proposed increasing gasoline, sales, and so-called "sin" taxes on cigarettes and alcoholic beverages (the latter by 100 percent to 300 percent). "Instead of seeking more taxes on Maryland citizens who responsibly enjoy legal products, lawmakers ought to be concerned about a real 'sin': the government's gluttonous appetite for more money," Berthoud observed.

"Elected officials who raise taxes may eventually pay the price for their poor judgment at the polls, but cash-strapped citizens start paying right away," Berthoud concluded. "Time is running out for Governor Ehrlich to repudiate the irresponsible budgeting of his predecessor."

National Taxpayers Union was founded in 1969 to work for lower taxes, the elimination of wasteful spending, and more accountable government at all levels. National Taxpayers Union Foundation (NTUF) is its research affiliate. More information, including copies of NTUF Policy Paper 140, Solutions to the States' Budget Ills, is available online at http://www.ntu.org.