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Senate passes bill to increase taxes for most in state

ANNAPOLIS — The Maryland Senate passed budget legislation on Thursday that includes an income tax increase for most taxpayers, leading a Republican lawmaker to say during a contentious debate that “Karl Marx would be proud” of higher taxes on the wealthy while a Democratic lawmaker described the comments as offensive.

The Democrat-controlled Senate voted 26-20 for the income tax increase, SB 523. All the yes votes came from Democrats while eight from that party and 12 Republicans voted against it.

The income tax bill was changed Wednesday night to collect more money from couples with taxable income of more than $500,000. A top bracket of 5.75 percent will apply to all of their taxable income after deductions. The change would raise an estimated $30 million on top of the initial proposal, which didn’t apply the increase from the first dollar. It would cost people in that bracket roughly $2,500 more a year.

Democrats supporting the increase described it as a fair and progressive way to maintain strong education funding.

“It is not radical,” said Sen. Paul Pinsky, D-Prince George’s. “It is not inappropriate. We pride ourselves, depending which day we come in here, about our school system. Well, it does cost money, and I believe that’s one of the reasons that millionaires come here.”

Lawmakers are working to balance the state’s books for the next fiscal year and to cut a $1.1 billion ongoing deficit in half.

Republicans contended the state could have achieved those goals by making about $1 billion in cuts to Gov. Martin O’Malley’s budget. That, Republicans said, basically amounted to holding spending level with the last budget.

Sen. David Brinkley, a Frederick County Republican who made the Karl Marx comment, and other opponents said the new top tax bracket punishes successful business people who are needed in Maryland to create jobs. Marx wrote “The Communist Manifesto” about economic class struggle and the problems with capitalism.

“This is as anti-entrepreneurial as you can get,” said Brinkley, who spoke after Pinsky during the debate.

Pinsky took issue with Brinkley’s comments after the debate.

“This tactic that’s been used over many, many, years — frequently called red-baiting — paints a brush by associating people with other figures, other names, other countries, and I think it was used inappropriately today,” Pinsky said.

Brinkley apologized for any personal offense.

“I do also believe that when we get into a conversation about class warfare and some of the policies that are now being advocated here, that’s exactly what it smells of, and so to the extent that there was any personal offense taken, please accept my apology to that, but I think also as we’re dealing with public policy decisions here which are very harmful to the people of this state and to the people of the country, I think there’s a clear delineation.”

The Senate also approved the state budget, SB 150, on a 37-9 vote.

A separate budget reconciliation measure, SB 152, which includes cuts and taxes on tobacco other than cigarettes and applies the state’s sales tax to online sales, was passed on a 34-12 vote.

The Senate also passed a bill, SB 848, to close loopholes local governments have been using to avoid paying the full amount required for school funding under the state’s maintenance-of-effort law, which requires local governments to spend at least the same amount on a per-pupil basis as the previous year.

The package of budget legislation now goes to the House of Delegates. Differences between the two chambers will need to be worked out in a conference committee before the scheduled April 9 adjournment of the General Assembly.