A Tax Break Denied
11/14/09 | 17 comments
Editorial

A Tax Break Denied


On Jan. 1, nearly every Mainer would have had a bigger paycheck. Now, because of a people’s veto petition, that won’t happen.

You can send your thank-you note to the Maine Republican Party, the Maine Green Independent Party or the more than 56,000 of your neighbors, and perhaps friends, who signed the petition to deny Mainers an income tax break. Better yet, save it for June and vote no on the repeal.

After years of hearing about Maine’s high tax burden, lawmakers earlier this year lowered the state’s income tax rate while broadening the sales tax base to provide greater stability. The fix, as is often the case with government, wasn’t perfect, but going back to the old system, which is what a vote for the repeal will do, is bad for business and bad for taxpayers.

Under the tax reform package passed this spring, 95 percent of Maine people would see a reduction in their income taxes, according to the Maine Revenue Service. Because the reform was to go into effect on Jan. 1, this meant that working Mainers would have had a bigger paycheck because their income tax withholdings would have been lowered.

But don’t take government bureaucrats’ word for it. The conservative Wall Street Journal and Tax Foundation extolled the tax changes. “No state has improved its economic attractiveness more than Maine this year,” the Journal said in a June editorial titled “Maine Miracle.”

The Tax Foundation, which has long criticized Maine’s high tax rate, said, “The reform effort is a positive step forward.”

So why would people want to undo it? Misunderstanding mostly, plus a dose of partisan politics.

The Republicans who back the repeal effort say most people won’t see a tax reduction. Again, don’t trust government bureaucrats to refute this. The Wall Street Journal says the changes will drop Maine’s income tax rate from seventh to 20th highest in the country.

Lowering the income tax would also help the many Maine businesses that file individual returns and encourages investment in the state, a likely reason the Bangor and Portland Chambers of Commerce supported it.

To balance the package, the sales tax was broadened, the meals and lodging tax increased and other small changes made. Broadening the sales tax base — Maine had one of the narrowest in the country — is necessary to stabilize state revenues, but it does mean Maine families will pay more in sales taxes. This will be offset by lower income tax payments for most.

Concerns, from both Republicans and Greens, that the changes harm the poor are especially confusing. At the behest of the governor, the legislation included a refundable tax credit specifically for Mainers with low incomes.

Naturally, most Mainers would prefer that their taxes were simply reduced. But they also expect a lot of services from their government — proposals to cut government programs or reduce services result in packed hearing rooms and howls of protest. They can’t have both, so the tax reform bill was a good balance.

Repealing it will shortchange Maine families and businesses — literally.

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Comments
17 comments on this item
On 11/13/09 at 6:04 PM, LilMikey wrote:         Repeated separate thumbs down will cause comment to be hidden

While we are in the thanking mood, can we thank the democrat controlled state govt for the high taxes presently in place? Can we also thank them for helping businesses not feel a desire to come to Maine? Can we also thank them for the jobs that are not here because no business wants to come here? Let's thank everyone while we are in the thanking mood...it's a joint effort.

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On 11/13/09 at 8:13 PM, SantiniSpagoandSpike wrote:         Repeated separate thumbs down will cause comment to be hidden

'LilMickey' is right. Thanks for the run-up. Seems, too, Baldacci and the Augusta Mafia has once again allowed the people's choice to be compromised. Tax breaks on income tax; but offsetting it with some kind of tax up-charge on consumer products. Then the meals and lodging tax rate increased. The State of Maine has you one way or the other. More in the paycheck, but you spend the tax deductions on other items through taxes levies (and more), anyway.

Does the Baldacci office really think everybody in the voting community of Maine has lost their minds? Think double on this one, JB!

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On 11/13/09 at 10:35 PM, Gopher wrote:         Repeated separate thumbs down will cause comment to be hidden

SSS, as I recall, you live out of state, in CA, right? So what do you care?

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On 11/13/09 at 11:42 PM, PIchris wrote:         Repeated separate thumbs down will cause comment to be hidden

No business wants to come here ? That's funny, Maine actually is doing a LOT better than most of the country, especially considering how far away from everything it is. I guess you young uns don't remember what it was like when things were really tough.

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On 11/14/09 at 6:16 AM, Yesman wrote:         Repeated separate thumbs down will cause comment to be hidden

When, oh when, will we read a BDN editorial critical of the Democrats' tax policies? I believe there is PLENTY to criticize.

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On 11/14/09 at 7:54 AM, Educator wrote:         Repeated separate thumbs down will cause comment to be hidden

What was the Maine Republican Party thinking on this one? You'd think it would object to RAISING the state income tax. Instead, it's objecting to LOWERING the state income tax. No wonder this party's candidates keeping losing elections! Maybe they should look in the mirror!

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On 11/14/09 at 8:27 AM, HarryHSnyderIII wrote:         Repeated separate thumbs down will cause comment to be hidden

The real tax break would have come from question 4, the BDN opposed it. another "break" would have come if question 6 had failed, the BDN supported it. In fact, in the forty years or more that I have read the BDN, they have NEVER supported any tax reduction provision, so I'm left wondering why this one? why now?

The answer may be connected to a lesson my father taught me when I was a youngster. Son, he said, there is no such a thing as a "tax exemption" there is just tax redistribution. So, yeah, as the BDN states the paychecks would have been larger, but the people who drive old cars would pay more for repairs because mechanic's labor would be taxed. there are other provisions which would more than wipe out any gains at the paycheck end.

The source used in this editorial is also suspect. When did any policy outlined by the Wall Street Journal help a working Mainer? seems to me it was that paper which told the textile companies and shoe shops to move south to save energy and employee costs.

I always vote, and in June I will be voting for repeal.

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On 11/14/09 at 8:30 AM, HarryHSnyderIII wrote:         Repeated separate thumbs down will cause comment to be hidden

Oh yeah, and while I think about it, I notice there is still no tax on newspapers!

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On 11/14/09 at 8:47 AM, RetiredCPA wrote:         Repeated separate thumbs down will cause comment to be hidden

The authors of this editorial have not taken the time to understand the tax law and they repeat the lies about how it is good for Maine business and the vast majority of Maine taxpayers. The facts are clear that the only winners in the new law were the very wealthy. The Maine Revenue Services report on the impact of the new law on Mainers in the year 2013 estimates that 4,638 taxpayers (the top 2/3 of 1% of Mainers) earning over $350,810 will get a net tax cut of $34.8 million, while the other 99.3% of Mainers will get a tax increase of $3.5 million. The BDN has refused to even listen to the facts on this issue and continues make false statements about the law. Don’t be uninformed about the facts. Go to www.mainedemocratstaxreform.org and read the Maine Revenue Services report for the year 2013. Also use the tax calculator at that site to see how the tax law will impact you for years 2010-2013.

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On 11/14/09 at 10:39 AM, Beelzebubba wrote:         Repeated separate thumbs down will cause comment to be hidden

The Baldacci Daily News strikes again...

REPEAL LD 1495!!!

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On 11/14/09 at 11:55 AM, fmrmti wrote:         Repeated separate thumbs down will cause comment to be hidden

RetiredCPA is right. This was an attempt to appease the masses...nothing more. If you look at the outyears and the near-term fine print, it was merely another shellgame to support their administration.

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On 11/14/09 at 12:08 PM, susanbAnthony wrote:         Repeated separate thumbs down will cause comment to be hidden

The time to do away with our representative government has Come! Citizens arise, change and create all laws by ballot, run a negative ad campaign, and voila! majority rules. Don't like barking dogs, put captal punishment for the dogs, or maybe the owners on the ballot. Don't like giving people who refuse to work and insist on being poor food stamps and TANF put that on the ballot and watch their children get hungrier and hungrier as entire families wander the streets with no place to live. Oh yes we can change the face of Maine, yes we can.

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On 11/14/09 at 12:27 PM, ClydeDurp wrote:         Repeated separate thumbs down will cause comment to be hidden

Yes Susan you are right a condescending attitide will solve all problems, especialy if you can't dispute the facts about the true cost of the bill.

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On 11/14/09 at 5:36 PM, HarryHSnyderIII wrote:         Repeated separate thumbs down will cause comment to be hidden

I love how the advocates of high taxes always point to the poor homeless starving children. Got news for those folks. We have the seventh highest OVERALL tax rate in the Nation, and there are still homeless people, hungry children, and a bunch of other social ills. My feeling is if Susan B. doesn't like hungry stlyhildren, she should dedicate her life to feeding them. Me, I'd rather pay for a unnecessary bridge from Hancock to Waldo County, with a tourist observation deck I'll never use, or a refacing of the capitol building with red Georgia granite, or maybe another 35,000,000, mistake at DHHS. I also like paying a premium for legislators who in general don't give a tinkers damn about the corner of the State where I live.

Heck there's a bunch of stuff which trumps homeless children... how about a costly government study to see if Mainers like high taxes?

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On 11/14/09 at 7:46 PM, Franklee wrote:         Repeated separate thumbs down will cause comment to be hidden

Is the BDN registered as a PAC ?

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On 11/15/09 at 8:13 AM, WTF266 wrote:         Repeated separate thumbs down will cause comment to be hidden

What absolute BS!!!!!

We will over turn this because there is not a tax break in sight!!!!

It is no more than rearranging the taxes, there are no CUTS. We want CUTS, we want LESS GOVERMENT. Cut until it hurts like the citizens have to.

How can they be so blind and stupid to not see that when they try to pass taxes off to the tourists...WE have to pay these too. Do we not get our vehicles repaired? Do we not like to go out to dinner occasionally?

Pathetic government.

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On 11/16/09 at 7:55 AM, chicky wrote:         Repeated separate thumbs down will cause comment to be hidden

this is a lift and shift nothing more. I do not want my poor and elderly neighbors supporting the legislative taste for all things pork. CUT SPENDING. Read the Maine Piglet Book.

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