Dear Council Member:
On behalf of the National Taxpayers Union's 7,100 members throughout Maryland, I urge you to reject any increase in the local wireless service tax. Intended to address a $121 million shortfall in the City of Baltimore's budget, the proposed tax hike of 50 cents per line will seriously hurt the city's wireless customers, especially low-income families and small businesses suffering in the midst of this bad economy. Instead of raising taxes, the City Council should look at ways to reform the city's budget to trim spending and find savings.
Baltimore consumers already pay a substantial amount in taxes for wireless service, including a $3.50 per line charge, a six percent state sales tax, and 911 fees. If the 50-cent tax hike is approved, the average Baltimore customer will shoulder a 28 percent tax load, which is four times heavier than what neighboring Baltimore County residents must now bear. Moreover, because the tax is levied per line, a family that buys a plan with three lines costing $59.97 a month will pay more in taxes than an individual who buys a single-line plan costing $99.99 per month. Many families rely on wireless service as their primary means of communication.
The proposed wireless tax hike will also harm small business owners and workers in Baltimore. A growing number of these Marylanders, from bakers to contractors, use wireless service to enhance communication with customers, complete more sales, and improve their logistical operations. If the City of Baltimore raises its tax on wireless service, the businesses that use wireless will be forced to seek out service that costs less, which will be available in Baltimore County. In these times of economic uncertainty and deficits, the City of Baltimore should not give businesses an incentive to spend their dollars elsewhere.
The City has many alternatives to further burdening the people it serves. For example, Baltimore has spent more than $1 million on lobbyists since 2000. Recent efforts to reduce the city's spending on lobbyists, along with other initiatives to find budget savings, should continue.
Baltimore already has a reputation as one of the worst-taxed jurisdictions in Maryland. The local "piggyback" income tax rate, property tax rates, and other various levies rank at or near the highest among cities and counties in the state. City officials should be working to reverse, not accelerate this economically destructive trend. They can begin doing so by rejecting out of hand any increase in wireless taxes.
Sincerely,
John Stephenson
State Government Affairs Manager