Governor Wes Moore’s declaration that raising taxes would require a “high bar” seems to have been more rhetoric than reality. For many Maryland taxpayers, this supposed bar appears distressingly low. The governor’s plan to impose higher taxes on households earning over $1 million and individuals earning over $500,000 annually is a stark departure from his high-bar promise and a policy laden with inequities and unintended consequences.
Maryland’s fiscal challenges are undeniable. With revenue growth projected at less than 2% for fiscal year 2025 and under 1% for 2026, and mandatory spending on programs like Medicaid expected to rise by 9% this year alone, the state faces a daunting budgetary imbalance.
Governor Moore’s proposal includes $2 billion in discretionary spending cuts. However, these cuts are paired with targeted tax increases on higher earners. While the absence of increases to sales or property taxes may provide some comfort, the broader approach of selective taxation undermines the governor’s commitment to fairness and economic growth.
The recent Gonzales Poll underscores Marylanders’ skepticism of new taxation schemes, with nearly two-thirds of respondents expressing opposition to tax increases as a means of addressing the state’s fiscal challenges. This sentiment highlights the electorate’s demand for fiscal discipline and innovative solutions over the well-trodden path of raising taxes. Selective taxation, regardless of how it is framed, is inherently unjust.
As Senator Stephen Hershey (R-District 36) aptly noted, raising taxes on higher earners risks driving these individuals—and their substantial contributions to state revenues—out of Maryland entirely. This is not a theoretical concern. Data from previous tax hikes show an exodus of successful individuals to states with more favorable tax climates, leaving Maryland with an even smaller tax base.
The notion of taxing those who have done “exceptionally well” financially might seem appealing in theory, but in practice, it becomes an exercise in punishing achievement. This policy is less about equity and more about window dressing, an attempt to placate voters while masking the underlying inefficiencies in Maryland’s fiscal management.
The threshold for who qualifies as having done “exceptionally well” financially will be crucial. If history is any guide, this definition is likely to skew lower than proposed during the legislative process, capturing not only the affluent but also many middle-class families who have diligently saved and invested. Governor Moore’s framing of this policy as “asking a little more” from the wealthy is, to borrow a phrase, “putting lipstick on a pig”.
Maryland’s reliance on mandatory spending growth is at the heart of this crisis. Programs like the Blueprint for Maryland’s Future, while laudable in their aims, require significant adjustments. Governor Moore has rightly noted that “adjustments” are necessary, but without genuine reform, mandatory spending will continue to balloon, exacerbating fiscal woes. Cutting only discretionary spending while leaving mandatory expenditures materially unchecked is akin to bailing water from a sinking ship without plugging the hole.
Governor Moore’s proposal to couple tax hikes on high earners with tax cuts for others and a reduction in the corporate tax rate sounds enticing on paper but is inherently flawed. This approach picks winners and losers in a manner that punishes achievement and stifles economic growth. Moreover, it fosters an anfractuous cycle: as discretionary spending is squeezed, the state will inevitably return to taxpayers—all taxpayers—for more revenue to fund an unsustainable status quo during the next few years.
The political dynamics in Annapolis further underscore the improbability of meaningful reform. As Senator Hershey predicted, little will be cut from the discretionary budget, taxes will be raised, and mandated spending will continue to expand unchecked. The legislature will “tax, spend, and turn the page” until next year, kicking the proverbial can down the road. Who among us doubts this outcome?
To chart a different course, Maryland must confront its fiscal realities with courage and clarity. Reforming the formulas that govern mandatory spending is imperative. Streamlining the state’s bureaucracy, as I argued in my December 11, 2024, Center Maryland column, must be a priority. Additionally, the state must cultivate economic growth by fostering a business-friendly environment, not by driving entrepreneurs and high earners away.
Governor Moore’s insistence that “taxes are a tactic, not an ideology” is worth remembering. But tactics, no matter how well-intentioned, must be rooted in sound strategy. Maryland’s path forward requires a disciplined, equitable approach to budgeting—one that respects all taxpayers, rewards achievement, and ensures the state’s fiscal health for generations to come. Anything less is a disservice to the millions who call Maryland home.
If Governor Moore can muster the fortitude to lead a true reorganization of Maryland’s sprawling bureaucracy and present a cogent, unapologetically realistic plan to revise and restrain mandatory spending in alignment with our fiscal realities, I will be the first to applaud his statesmanship. Indeed, I will champion his cause with unbridled vigor, for such an endeavor would be nothing short of heroic—a triumph of principle over expedience, of vision over inertia. It would be a testament that leadership, when rooted in prudence and equity, can rise above the clamor of demagoguery to chart a course worthy of Maryland’s promise and its people.
Clayton A. Mitchell, Sr. is a life-long Eastern Shoreman, an attorney, and former Chairman of the Maryland Department of Labor’s Board of Appeals. He is co-host of the Gonzales/Mitchell Show podcast that discusses politics, business, and cultural issues.
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