It’s looking more and more like Maryland might just be an anti-business state, as critics have maintained for years.
Many have suggested conducting business in Maryland is much tougher compared to others around us. Many point to crippling income taxes for those who make a solid living, while others point to the recent sales tax increase and expansion to new realms and consumer fee increases as worthy examples.
There comes a time when it’s impossible to conclude this is not a fact. Two recent examples probed confirm the point.
Businesses across Maryland received official notice of how much they will be paying the state in unemployment insurance this month. Unless they have not had an employee on unemployment for the last three years, the chances are nearly all businesses will have to pay a tremendous amount more than they did last year and an absurdly higher amount than two years ago.
Over the last two years, business owners in January have endured sticker shock when opening unemployment notices from the state. The notice identifies what the individual company’s contribution rate will be for the new year. That rate is determined by dividing unemployment insurance benefits paid to former employees over the last three years, and charged to your account, by the amount of taxable waves reported on quarterly unemployment insurance contribution reports during the same three-year cycle, according to the annual mailer.
An informal poll of three businesses this week found an average single-year increase of 12 percent for the companies, due in large part to the businesses downsizing and becoming more efficient.
One business owner reported to this paper this week that he called the state about getting set up on a payment plan, options of which were included in the notice increase earlier in the month. Unfortunately, he reported the payment plan cannot start till the end of the first quarter, making it useless for him because all of his employees will have surpassed the $8,500 taxable amount by the end of April. This is demonstrates how out of touch Maryland is with its small businesses.
Another example of unfair business practices in Maryland is a proposed drastic increase to the minimum wage, from the current $7.25 per hour to $10 per hour by 2013.
Fortunately, this 38-percent increase has not been approved yet, but many Democrats feel it’s appropriate to give Marylanders more income to spend and subsequently helping the economy as a whole.
That’s an assumption that does not bear out for all. Many studies have shown that increasing take-home pay does not necessarily reflect in an increase in spending, rather conservative residents tend to save it instead.
Delegate Mike McDermott is right when he said last week, “I think it shows a real lack of understanding for what is going on in the real world. If you’ve been working in government for a long time, you’ve probably never signed a paycheck or filled out a payroll.”
Maryland needs to wake up and understand small business is the backbone of this state, and laws need to reflect this reality. Instead, most small businesses bite our nails throughout the entire legislative session worrying over which laws will be passed taking more money out of our pockets. That’s the reality.