In the brouhaha between Change Maryland and Governor Martin O’Malley (full disclosure – Change Maryland’s President Larry Hogan is an MPPI board member), the data compiled by the nonpartisan Tax Foundation has been trotted out by both sides to make their points. The Tax Foundation itself chided Gov. O’Malley for misrepresenting its data, so it may be a good idea to see exactly what these data say. Where does Maryland’s tax structure rank, especially as compared to our neighboring states?

Maybe the most important measure is something the Tax Foundation calls “Tax Freedom Day,” which they define as “the day when Americans finally have earned enough money to pay off their total tax bill for the year.” In this ranking, it’s better for taxpayers if a state is ranked low, not high. The lower the ranking, the less time the average taxpayer spends working to pay state taxes. As the Tax Foundation explains, Maryland doesn’t rank so well compared to other states (or even the District of Columbia):

In 2012, Maryland taxpayers work until April 23 (ranked 5th nationally) to pay their total tax bill. The Tax Freedom Days of neighboring states are: Virginia, April 20 (ranked 11th nationally); DC, April 20 (ranked 11th nationally); West Virginia, April 8 (ranked 39th nationally); Pennsylvania, April 18 (ranked 14th nationally); and Delaware, April 17 (ranked 17th nationally).

When it comes to our state and local tax burden, we do a little better, but not much:

Maryland's 2009 state and local tax burden of 10.0% of income is slightly above the national average of 9.8%. Maryland's tax burden has decreased overall from 11.0% (11th nationally) in 1977 to 10.0% (12th nationally) in 2009. Maryland taxpayers pay $5,218 per capita in state and local taxes.

In terms of rankings, in this area again it’s better to be ranked low than high. Maryland ranks 12 while Delaware ranks 23, DC ranks 24, Virginia ranks 33, and West Virginia ranks 27. Only neighboring Pennsylvania, ranked at 10, comes in for a worse score than Maryland.

For business taxes, Maryland also ranks poorly. In this area, it’s better for businesses if the score is low rather than high:

Maryland ranks 42nd in the Tax Foundation's State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on property, including residential and commercial property. Neighboring states rank as follows: Delaware (12th), Pennsylvania (19th), West Virginia (23rd) and Virginia (26th).

The governor used Tax Foundation data to attack Change Maryland’s study that showed an exodus of taxpayers leaving the state, so he must have some confidence that this organization is producing solid tax analysis. But by most measures compiled by the Tax Foundation, Maryland’s tax structure is pretty bad. Almost without exception, it is worse than our neighboring states. It may be a good idea for the governor to sit down with the Tax Foundation analysts and figure out what the state should do to reform its tax code to make our state more competitive. If we don’t do something to change, we’re likely to continue the disturbing trend documented by Change Maryland’s study.