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In a recent column, Dan Rodricks of the Baltimore Sun argued for Maryland to adopt comprehensive tax reporting, which he argued would close loopholes and generate hundreds of millions of dollars in new revenue. (“Dan Rodricks: Maryland lawmakers need to close tax loopholes that protect corporate profits,” February 16). However, as representatives of more than 6,800 businesses across Maryland, the Maryland Chamber of Commerce has serious concerns regarding this complex policy.
In a recent report on the state of Maryland’s economy, Comptroller Brooke Lierman said Maryland’s economic growth effectively stalled in 2017, and regional competitors have been gaining momentum since then. Despite this, it conveyed a solemn message that the situation remains stagnant.
Now, with budget deficits looming and schools, health programs and infrastructure underfunded, policymakers are scrambling to fill the gaps. But even more alarming is what Maryland’s economic stagnation indicates: a lack of competitiveness to attract the job creators, investment, and growth essential to strengthening Maryland’s economy. This critical juncture requires strategic solutions that prioritize job growth, business investment, and economic expansion to improve the state’s competitiveness on the regional and national stage.
Some policymakers and advocates tout integrated reporting as a strategic solution or “loophole closing,” which shifts tax burdens between industries without increasing net revenues in the long run. It is a complex tax policy.
One of the most unstable tax systems, integrated reporting means that in some years it imports profits from other states, but in other years, especially during economic downturns when state funds are needed most. You will be importing losses from other states.
Two Maryland commissions (Corporate Tax Reform Commission in 2010 and Economic Development Commission in 2016) thoroughly examined integrated reporting and significantly increased tax burdens across industries without increasing net revenues. It explicitly rejected the integrated report, warning that it would result in redistribution to the United States.
While Rodricks maintains that integrated reporting won’t drive businesses away from the state, the complex policy does threaten to hinder business investment and job growth to address Maryland’s budget problems. is.
Neighboring states, including Virginia, have refused to adopt integrated reporting because of its potential negative impact on the business environment. Similarly, Pennsylvania, Delaware, North Carolina, Tennessee, Georgia, and Florida are among 22 other states that have chosen not to adopt integrated reporting. Notably, these states topped Maryland in both CNBC’s annual Best States for Business rankings and U.S. News and World Report’s most recent Best States for Business rankings . It is also worth noting that no state in the United States mandates “global integrated reporting,” as Maryland is currently considering.
If integrated reporting becomes a reality, the short-term revenue increases would be far outweighed by the long-term negative effects on Maryland’s ability to attract job creators, foster innovation, and grow the economy. Maryland is one of the most pro-business states in the country, welcoming job creators and removing barriers to business expansion and expanding the tax base, rather than relying on tax policies that can hurt economic growth and competitiveness. It is necessary to adopt policies that position the country as such.
Rather than pursuing integrated reporting, Maryland should continue to focus on streamlining regulations, improving competitiveness, and extending the welcome mat for business investment and growth.
Governor Wes Moore’s vision for Maryland to be the most pro-business state with an investment-friendly environment will guide us. Adopting integrated reporting would send the opposite message: Maryland is closed for business.
— Mary D. Cain, Annapolis
The author is president and CEO of the Maryland Chamber of Commerce.
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