[BES Friends] Loophole lobbying

[Stephen Meskin]

I thought you would be interested in this message from my Delegate.
Stephen Meskin

-------- Original Message --------
Subject: 	FW: Loophole lobbying
Date: 	Wed, 6 Apr 2005 16:10:14 -0400
From: 	Delegate Elizabeth Bobo <Elizabeth_Bobo at house.state.md.us>
Reply-To: 	<Elizabeth_Bobo at house.state.md.us>
To: 	<elizabeth_bobo at house.state.md.us>





I thought you may be interested in the following editorial which appeared in
yesterday's Baltimore Sun.  I am the lead sponsor of the Limited Liability
Corporation campaign donation loophole bill and a co-sponsor of the Limited
Liability Corporation transfer tax loophole.  We have four days left in this
legislative session before we adjourn at midnight on Monday, April 11.  If a
large number of people around the state were to contact their senators in
support of these bills, they could still pass.  Any help you and your
friends and associates could give us would be welcome.

Liz Bobo


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Loophole lobbying
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April 5, 2005
LAWMAKERS SHOULD be outraged -- but, predictably, they don't seem to be.
Reports show Edward A. St. John of MIE Properties has poured $160,000 into
the state's 2006 election. To accomplish this feat, he had to bypass the
state's law restricting donations to $4,000 for individuals and $10,000 per
company. How did he do it? By funneling the money through more than 50
companies he runs out of his Baltimore County office.

And why would Mr. St. John have so many subsidiaries? Because
property-holding firms such as MIE typically sort their holdings into LLCs
and LLPs -- limited liability corporations and limited liability
partnerships. Ostensibly, this is to protect from liability lawsuits. But a
loophole in tax law gives big companies an extra incentive: LLCs and LLPs
aren't subject to real estate transfer taxes. On big-ticket properties such
as shopping malls, this allows the owners to avoid paying hundreds of
thousands of dollars in taxes. All the Mr. and Mrs. Average Homebuyers
aren't so lucky; they get stuck with the bill.

Seems like the two loopholes are now feeding off each other. As more
companies convert to LLPs and LLCs, their clout grows.

The House of Delegates has approved legislation to correct both problems.
One bill would close the tax loophole for companies with assets of $1
million or more; the other would close the campaign donation loophole by
counting subsidiaries as part of one business entity.

Both measures are stuck in Senate committees. Under the House bill, the
added tax revenue would pay for public school construction, a
multibillion-dollar problem in Maryland. Looks like senators care more about
the largesse of campaign donations.





Copyright (c) 2005, The Baltimore Sun

Link to the article:
http://www.baltimoresun.com/news/opinion/bal-ed.llc05apr05,1,3511383.story