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The Tentacle


January 19, 2012

There They Go Again Another Tax Increase

Blaine R. Young

I thought it must have been a dream – actually, a nightmare – because I certainly never believed that in the current economic times someone would propose to raise yet another tax for the purpose of raising money to build something that the market has said repeatedly is not needed and likely will not be successful.

 

What I am talking about was the proposal floated last week to raise the hotel/motel tax in Frederick County from 3% to 5%. This would raise an estimated additional $700,000 from people who are coming to our county to stay here and spend money at our local businesses. Surely, it will drive some of them away, but that does not seem to be important when we are talking about just another one of the seemingly endless supply of taxes that we have to pay in this county and in this state.

 

What really got my attention, and what boggled my mind, is what they intend to do with this revenue each per year. It is proposed to use some of that money to fund a new hotel/conference center in Frederick City or Frederick County.

 

That’s right! We are told we should raise taxes on local hotels and motels in order to provide funding for the government to participate in a new hotel which will directly compete with the businesses we are going to tax.

 

Does that make any sense to you? If I own a hotel or motel in Frederick County and had been making payroll and paying my taxes and doing everything else as a good corporate citizen all these years, I would be upset.

 

And the last thing we need is for the government to tell the market what should be built and where it should be built. The State of Maryland tried that at Rocky Gap out in far Western Maryland, and now we have this big white elephant with a fancy golf course and hotel, but not enough golfers or guests. That was done because certain state representatives decided it would be a good idea, not because the market dictated that it would be a successful venture. When government makes decisions on the allocation of capital resources, rather than the market, government invariably is wrong.

 

If a hotel/conference center is needed in Frederick, then the private sector will make it happen. There is no shortage of companies who build these things. When the demographics and the market determine that such a venture will be successful, private capital will flow in and make it a reality. We do not need government creating additional taxes and telling us that it is a good idea. That will only lead to a disaster, just like Rocky Gap.

 

Now, if the government did want to do something to help ensure that a hotel/conference center would be a success here, they could amend the law and allow gambling in such a facility. Slots and table games in Frederick County likely would be an enormous success, as thousands of gamblers pass through here every day on their way to Charles Town, WV. Go there and look at the parking lot; it is filled with cars with Maryland license plates.

 

I will make you one bet. The majority of representatives at the state level will not make such a courageous decision. They will instead see fit to tax us and tell us what we should be doing with our money, and how it should be spent, which will only lead to more trouble, more taxes, and an even bigger and more bloated government.

 

Something needs to be done about this, and it is not more taxes. As many of us have said many times over and over – in the State of Maryland, we have a spending problem, not a revenue problem.

 

Blaine@BlaineYoung.com

 



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