Fair Share Act seeks to reshape MD tax code to tax wealthy, large corporations to fill defecit

SALISBURY, Md – A new bill before the General Assembly would aim to close corporate loopholes and increase taxes on wealthy Marylanders and corporations.

Advocates for the Fair Share Act claim that nearly 1/3rd of major corporations currently operate in a way that has them paying little to no taxes.

“Today, about a third of the largest corporations in the state pay zero income taxes in a typical year, while our small local businesses are paying their fair share and contributing to their local economy,” said Director of the Maryland Center on Economic Policy Benjamin Orr, who spoke in favor of the bill during a hearing Wednesday.

Orr tells 47ABC the taxes could add billions in revenue without impacting small businesses or low-income households, with the bill expanding eligibility for a fully refundable earned income and child tax credits.

Orr tells us he believes that companies would not leave the state due to the higher figures, but says not raising taxes to improve conditions will.

“What builds a vibrant economy and attracts investment is, number one, a well-educated workforce which starts with good, well-funded public schools, a transit and road network that helps people and supplies get around easily,” he said.

The bill is being supported by the Worcester County Teachers Association which says the state must raise revenue to help boost teacher salaries.

“Revenue is going to be a benefit for us because right now I can’t recruit, I can’t rehire, I can’t get the best of the best every we want Maryland to be top of the heap, so the money’s gotta come from some avenue,” Said WCTA President Beth E Shockley-Lynch.

The Wicomico NAACP also expressed their support of the bill, citing conditions on Delmarva that they believe could be better served.

“With a third of large corporations not paying any income tax, it is a slap in the face to everyday citizens who are struggling to keep up.  With a lack of affordable housing, growing food prices, and a skyrocketing unhoused population in Wicomico County, we have to find new sources of funding to help. The Fair Share Act provides a much-needed narrowing of the wealth gap and thereby decreases racial inequity. The money generated could provide proper funding for our schools, and mental health resources and benefit small and family-owned businesses.” said Director Monica Brooks.

But the Salisbury Area Chamber of Commerce has come out against the measure, saying it would make the state unfriendly to businesses and could see a flight of wealthy Marylanders, citing California as an example where marginal tax rate increases have resulted in wealthy citizens moving states.

“We can’t tax our way out of the issues that Maryland’s budget situation is facing right now, you need to find a way to raise new revenues and our governor has said let’s find ways to raise new revenues,” said the Chamber of Commerce President Bill Chambers.

The Chamber is sponsoring legislation in the House of Delegates to decrease the State’s Corporate Tax rate to the mid 6% range, down from 8 percent and in line with Pennsylvania.

However, Orr says that strategy was already tried after 2008 and they argue the state is still recovering from those consequences.

“The result was that we were laying off teachers as our school enrollment rose, we cut back on local public health services, you know, a few years before we had a pandemic, we put less into affordable housing and of revitalizing neighborhoods, we froze public employee salaries and made lots of other cuts to public services,” Orr said adding that even conservative groups such as COST have found Maryland businesses receive a 1.25 return for every dollar spent in taxes in the state.

“We invest, tax our taxes in education. And now employers don’t have to train new employees as much. They can hire well-educated employees. We don’t always feel like it, but we work to keep our roads in good repair. And so it means that the cost of getting goods to markets is maybe a little bit less as your repair bill goes down and we have a functioning court system so that they can enforce contracts and things like that,” Orr said.

However, Chambers says businesses on the Shore, Delaware or Virginia could represent a low-distance move for businesses, and points to neither state having higher income taxes, or combined reporting. He says while the bill may not target small businesses or low-income workers, they will still feel the impact.

“Those large businesses will pass on any tax increases not only to consumers but just the small businesses that are vendors of theirs,” Chambers said.