10/25/2007
CONTACT: Ellen Valentino, 410-693-2226 or Jason Brewer, 202-406-4435
Tax increases could lead to job losses among Maryland's small employers
ANNAPOLIS, Md. -- Small-business owners have a message for lawmakers as they begin a special session next Monday to debate a myriad of tax increases proposed by Gov. Martin O'Malley: Cut spending before asking employers and families to open up their wallets.
Maryland's leading small-business advocacy group, the National Federation of Independent Business, issued a ballot to its members in mid-October to gauge support among the state's small businesses for the O'Malley tax plan. Ellen Valentino, state director of NFIB/Maryland, announced today that Maryland small-business owners' overwhelming opposition to plans to raise sales, income and corporate taxes to cover a projected shortfall in Maryland's budget.
Of NFIB members who responded to the ballot:
- 85 percent opposed an increase in the Maryland sales tax rate from 5 to 6 percent
- 92 percent oppose an expansion of the sales tax to services
- 94 percent opposed an increase in the corporate tax rate from 6 to 7 percent
- 73 percent opposed creation of a new income tax bracket for individuals making over $150,000
- NFIB members supported slots at racetracks and were split on the issue of a $1 cigarette tax increase
Small business is the undisputed engine of the American economy, employing more workers and generating more net new jobs than big business and large corporations combined. According to the Department of Commerce, over the past decade small businesses created 60-80 percent of the net new jobs. In the most recent year with data (2004), small firms accounted for all of the net new jobs.
In announcing the results, Valentino reminded lawmakers of the critical role small business plays in the economy.
"We all want good roads, safe neighborhoods and quality schools," Valentino said. "But we expect our elected officials to tighten the belt a little before asking small businesses to shoulder a new tax burden."
"I'm concerned about the impact all these tax increases are going to have on my customers," said Michael Kostinsky, owner of Sorrento of Arbutus. "If they are forced to cut back, I'll have no choice but to reduce payroll."
While small-business owners have not agreed on a consensus view as to how the budget crisis should be solved, it is clear that they believe that all levels of government should explore ways to cut spending and reduce waste before raising taxes.
NFIB/Maryland depends on the consensus views of its members as determined by member ballots to establish its stand on issues affecting small business at the state and national levels.
