Tax reform package a good deal for Maine
6/27/09 | 11 comments
guest column

Tax reform package a good deal for Maine


Joe Perry

The Maine Legislature, led by Democrats, recently passed a historic tax reform package that will cut the taxes of Maine people by $55 million. Next year, most Maine taxpayers will save between $100 and $500 on their tax bill. Maine people, except for State House Republicans, recognize this as a good deal. In fact, the Wall Street Journal called it the “Maine Miracle” in an editorial.

Incredibly, Republicans are trying to repeal this tax cut for Maine people. It is hard to believe that in these challenging economic times, with Maine families and businesses struggling, the “conservative party” wants working Mainers to pay more taxes next year, but that is exactly what they are trying to do.

While the tax reform package is full of complex tax law, its principles are easy to understand. A reduction of more than 20 percent in the income tax rate is paid for by applying the sales tax to a few discretionary items such as candy, movie tickets, amusement rides and certain repair services. It also modestly increases the tax on rental cars, meals and lodging, items that are paid for in large part by tourists from out of state.

Under the new law, nearly everyone receives a dramatic cut in their income taxes and pays the sales tax on a few additional items. When all is said and done, the average Maine person will pay about $170 less in taxes than under the old system. That amount is not miraculous, but it is money that goes right back into the economy. Paying lower taxes means families will have more money to pay the bills, build their savings, go out to eat or see a few more movies. All in all, it is a good deal for Maine people.

The benefits are not just for individuals. Ninety percent of Maine’s small businesses pay taxes under the individual income tax system. This means next year most Maine small businesses will pay substantially less in income taxes. Businesses will turn around and invest this money to grow their companies and create jobs.

For too long Maine’s high income tax has acted as a barrier for companies looking to locate here. Now, Maine’s income tax is in the middle of the pack, sending a message to the world that we are more than a beautiful place to vacation; we also are a competitive place to do business. With an unemployment rate of 8.3 percent, the need to attract new businesses has never been greater.

Still, the Republican Party is undertaking a statewide campaign to repeal this law. They claim that the tax relief is not enough and that the package has a negative impact on our “business climate.” I bet that most Maine people believe that any tax relief is a good amount and that giving them more money to spend as they choose does in fact dramatically improve the business climate.

The Legislature’s goal in fully debating and vetting an overhaul of our tax system was to put more money in people’s pockets while helping small businesses thrive. This is exactly the type of action we must embrace to get out of the recession and to continue strengthening our economy for years to come. By contrast, repealing this law now further damages our weakened economy and prevents Maine from attaining a needed competitive advantage.

A cynic might think that Republican opposition is pure politics. After all, it will be tough for their candidates to win elections during a national and state recession while Democrats delivered a few hundred dollars in tax relief to Maine people. Boosted by stimulus spending, the national economy is seemingly turning a corner. Maine needs to go in that same direction. We cannot afford to take a huge step backward by repealing a law that helps Maine people and the economy.

Sen. Joe Perry, D-Bangor, is the Senate chairman of the Legislature’s Taxation Committee.

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Comments
11 comments on this item
On 6/27/09 at 8:21 PM, glenna wrote:         Repeated separate thumbs down will cause comment to be hidden

Sometimes it seems that whichever political party is out of power must spend its time and energy criticizing the other - no matter what the political party in power accomplishes. Mind you, I have no love for the Maine Democratic party - but in the face of major irritation of the lack of tax reform over the last seven years, they had to come up with something before the taxpayers bill of rights (or whatever its called) comes before the voters via referendum in November. And I'll still be voting for it. At the moment the Maine Republican Party sounds like - looks like - a bunch of whinning babies to complain about what has been accomplished. Get real ladies and gentlemen. You just didn't have the votes to do it yourselves.

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On 6/27/09 at 10:59 PM, EJParsons wrote: Click here to view hidden comment         Repeated separate thumbs down will cause comment to be hidden
On 6/27/09 at 11:35 PM, blueskiesaboveme wrote:         Repeated separate thumbs down will cause comment to be hidden

The party of No is suspicious of a democratic bill?

Or maybe just jealous because tax reform is supposed to be Republicans party's gig right?

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On 6/28/09 at 4:43 PM, Thrasybulus wrote:         Repeated separate thumbs down will cause comment to be hidden

Everyone who makes less than $60,000 a year will pay higher taxes under this bill. Everyone who makes more than $150,000 a year will pay less. (Those in between? Depends on what you spend money on, etc.)

So Perry is right - folks making a million dollars will get large tax decreases ($20,000 a year and up) while small people get screwed. That is how he arrives at his figure of $170 "on average".

Next year, when a ONE and a HALF BILLION $$ hole is "found" in the budget, the income tax relief will be repealed, and the Dems will have achieved their purpose - BAIT & SWITCH.

Wake up and sign the People's Veto and VOTE THIS DOWN. and throw that crook Perry out while you're at it.

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On 6/28/09 at 9:01 PM, JosephMartin wrote:         Repeated separate thumbs down will cause comment to be hidden

This is FLIM-FLAM, folks!

If you want a quick check on the reality - did you notice that the Gov has tried to associate this "tax cut" with the lower state budget? That is BALDERDASH!

The state budget was cut because Maine is OUT of money.

AND if this flim-flam is supposed to be "revenue neutral" ... how can these folks claim it cuts taxes?

NOPE: The Legislature wants to "stabilize" THEIR revenues, and since they have so screwed up Maine's business climate that Mainers' incomes are falling... their only recourse is to tax something else. Something that WILL grow, no matter how much harder they make it to earn a living in Maine!

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On 6/29/09 at 8:39 AM, BeaverFood wrote: Click here to view hidden comment         Repeated separate thumbs down will cause comment to be hidden
On 6/29/09 at 1:58 PM, coopah wrote:         Repeated separate thumbs down will cause comment to be hidden

This is not a good law. But it is better then what we had. This is not a matter for a referendum but a matter to be tweeked and realigned in session. Not because it is too complicated for the people of Maine - it isn't. But there is no need to throw the baby out with the bath water. I have had many communications with Piotti regarding this bill which, as a Democrat and voter here in Maine, I opposed. I have written letters to the editor regarding this bill BEFORE it became law. We lost - suck it up - get your ducks in a row and work to accentuate the positive baby.

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On 6/29/09 at 7:30 PM, Ladyslipper wrote:         Repeated separate thumbs down will cause comment to be hidden

Joe Perry what an absolutely non bipartisan letter.....Does it make you feel better to tear down and discredit your fellow Republican state reps? I'm waiting for a reply from Josh Tardy......just to make it fair......

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On 6/29/09 at 7:44 PM, chersully2000 wrote:         Repeated separate thumbs down will cause comment to be hidden

glenna: "Sounds like a bunch of whining babies."....yes, sometime it really does. Apparently Limbaugh said something today directly or indirectly blaming President Obama for So Carolina Governor Sanford going to Argentina to see his lover!!!! You know....poor Sanford feels so little "hope"anymore...what with having to take the stimulus money for his state which he did not want to take....so he needed to relax (according to Limbaugh) and he did that by deciding to go to Argentina to see his lover...even though his wife had told him not to go! No kidding!! And many of those on here and elsewhere give Limbaugh a lot of credence. No wonder some of us just are amazed at that kind of thing (and not in a positive way!) After awhile, there is little credibility in some areas. I mean that is something no intelligent mind could even grasp or accept (what Limbaugh said.)

But, to the topic at hand (this article).....at least Democrats are trying to do something. Olympia Snowe is working hard to try and achieve some kind of healthcare reform and all she gets is criticism from the far right Republicans. As she said today, no one in this country should have to go without healthcare. Amen!

And this taxpayer bill, although maybe not perfect, is worthy of consideration instead of dismissed just out of hand. If not this.....what good alternative do they really have?? There are no guarantees, but anything that might make businesses consider Maine a more attractive place to do business, has to be looked at and considered.

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On 6/29/09 at 8:38 PM, mAineAc wrote:         Repeated separate thumbs down will cause comment to be hidden

This taxpayer bill is an increase in taxes. Read it thoroughly, if you really don't think it is then you didn't read it. They need to really change their thinking if they are going to create more income. You need to change the business environment in this state if you are going to increase state income. Doing the same thing over and over again and expecting different results after 40 years is the definition of lunacy.

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On 6/30/09 at 7:36 AM, ConnieD wrote:         Repeated separate thumbs down will cause comment to be hidden

No attractive alternatives???!!!!???? Well, I have a few:

1) throw the "bums" out! That includes both Republicans and Democrats. They are all self-serving egotists. They do not care about their constituents' opinions.

2) Complete overhaul of the tax structure. There are some good ideas out there, like the straight tax.

3) STOP the reckless spending. I doubt most Mainers are aware of the many programs subsidized by the state. Social welfare now takes up most of the tax pie, with education following close behind. Roads, once one of the most important reasons to gather taxes, only has a sliver of the pie. Maine is now a socialist state, as the government workers hold the largest voting block in the state. Augusta has grown and grown and grown in the last 30 yrs. There is such incredible waste. Just look at the educational department, and the great number of positions associated with it. There are now secretaries to the secretaries. There are ed people in Augusta who make far more than your average teacher, pushing pencils. State government should be reduced by 50%.

4) Cut back the cushy state legislature. Do people realize that after one term of office, they have medical and retirement for life??????

Sorry, there are a ton of alternatives. The problem is that the government will not cut itself. The PEOPLE will have to rise up, and believe me, there is an undercurrent, throughout Maine, and the USA, of tremendous frustration brewing.

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