Sunday, November 11, 2007

Franchot Silent on Corporate Tax Loopholes

C. Fraser Smith of the Baltimore Sun reports that Comptroller Peter Franchot's progressive act is only for public consumption:

The Democratic Party's Senate caucus was full of grumbling last week about Comptroller Peter Franchot, who called Gov. Martin O'Malley's tax reform package a "pounding" for the poor.

At the same time, Mr. Franchot was stepping away from the governor's proposal to require taxes of some mega-corporations that currently pay no taxes in Maryland. Mr. Franchot had absented himself from the Budget and Tax Committee's effort to craft an acceptable loophole-closing bill.

Democrats were baffled by Mr. Franchot's absence from the corporate tax debate, because he has styled himself a staunch liberal. His office, moreover, is responsible for collecting taxes. A recent study showed that nearly half of Maryland's largest for-profit companies did not pay corporate income taxes in 2005.

One widespread speculation explaining his silence on the issue: The officers of these corporations often make substantial campaign contributions. Maybe the comptroller was looking ahead to his next campaign.

Several senators thought Attorney General Douglas F. Gansler should investigate Mr. Franchot for failing to do his job. Senate President Thomas V. Mike Miller Jr. - chuckling - said he was sure Mr. Gansler would be happy to oblige: Even now, Mr. Franchot and Mr. Gansler are viewed as rivals for their party's gubernatorial nomination in some future election.
Not only did Franchot himself not participate in the Budget and Tax Committee's debates on the budget, he also did not send his staff in contrast to former Comptrollers Louis Goldstein and William Donald Schaefer. Many of these long-time staffers have a lot of knowledge which would have been especially useful this year since many of the budget experts in the Department of Legislative Services are relatively new to the job. Perhaps not the best move on Franchot's part after getting in a very public wrangle with the governor over his decision to greatly expand the size of the Office of the Comptroller's payroll.