By Sam Smith | Maryland Reporter
ANNAPOLIS — Maryland needs to lower its corporate income tax to offset possible massive job cuts from the fiscal cliff, said economist Anirban Basu to the members of Maryland’s Chamber of Commerce.
Basu said the Free State is three times more vulnerable to the impact of federal reductions than any other state. The number of Americans that work for the federal government is 2.1 percent, while 5.2 percent of Marylanders get a federal paycheck.
With extensive cuts scheduled for the Department of Defense and National Institutes of Health, both staples in Maryland’s economy, Basu said Maryland is in for a “world of hurt.”
“We need to change our economy and position ourselves to attract more private capital. How do you do that? By having one of the worst business tax climates in the country? No. That is, actually as it turns out, not the way to do it,” said Basu, CEO of the Sage Policy Group Inc., economic policy and consulting firm.
Basu cited the Tax Foundation’s 2013 State Business Tax Climate Index, which ranked Maryland as the 10th worst business tax climate in the country and should be concerned with staying competitive with Virginia in attracting potential businesses.