Jealous Pitches Sales Tax Cut, Paid For By Hedge Fund Managers | WYPR

Jealous Pitches Sales Tax Cut, Paid For By Hedge Fund Managers

Sep 6, 2018

Democratic gubernatorial nominee Ben Jealous and his running mate, Susan Turnbull, announce proposed changes to state taxes during a press conference in Hampden Thursday.
Credit Rachel Baye

Let’s say you buy a new TV for $500 dollars. Maryland’s current 6-percent sales tax would add $30 on top of that.

Democratic gubernatorial nominee Ben Jealous announced Thursday that if elected, he would cut the state sales tax to 5.75 percent, saving you $1.25 on that TV purchase.

Jealous estimates that the tax cut would cost the state between $175 and $193 million a year. He says he would recover about $58 to $78 million by closing a loophole that allows hedge fund managers to pay a lower capital gains tax rate on part of their income.

“It’s unfair that hedge fund managers pay a lower effective tax rate than their secretary,” he said during a press conference Thursday. “And it’s unfair that people shopping on Main Street have been paying a higher sales tax than they need to in part to help subsidize hedge fund managers’ profits.”

Jealous would lean on sales taxes on internet purchases — which the state already plans to begin collecting next month — to make up another $50 to $150 million. Together with the tax hike on hedge fund managers, he expects this would add up to about $108 to $228 million, which may or may not close the gap left by his tax cut.