AUGUSTA, Maine — A measure requiring that any surplus revenue in the state’s general fund be used to gradually reduce income tax rates passed through a legislative committee Tuesday and now awaits votes in the House and Senate.
As passed Tuesday, the proposal would use unexpected general fund revenue first to increase the income tax brackets and then to reduce the highest income tax rate gradually, eventually reaching 4 percent.
During the last session, the Republican-controlled Legislature and Gov. Paul LePage enacted some aspects of tax reform through the $6.1 billion biennial budget by reducing the top income tax rate from 8.5 percent to 7.95 percent.
LD 849 takes that one step further, but only if the state’s general fund reports a surplus. State law already includes a priority list for distributing unexpected general fund revenues to accounts, including tax relief.
“People say, ‘Why do this? We never have money.’ But in the 1990s, there was a ton of money and we missed an opportunity to provide true tax relief,” Senate Majority Leader Jon Courtney said. “This is a long-term commitment going forward. It sends a strong message across the country that we’re not going to stop until the top rate is 4 percent.”
Courtney said Maine’s income tax rate has long been one of the biggest deterrents for potential businesses.
Reducing income taxes without accounting for the lost revenue elsewhere could create big holes in the state budget, but Courtney said it forces lawmakers to look hard at spending, too.
Democrats on the Taxation Committee opposed the bill when it came to a vote Tuesday, setting up what could be a lively debate on the House and Senate floors
“Passing something that does nothing today leaves me feeling uncomfortable supporting it,” said Rep. Elsie Flemings, D-Bar Harbor.
LD 849 had been carried over from the 125th Legislature’s first regular session and was used as a framework for a broader discussion by the Taxation Committee during several work sessions last summer.
Taxation Committee members ultimately declined to put forth any wholesale tax reform plans, but some felt that the carryover bill, slightly amended, was still a good step.
In 2008, with strong majorities in the House and Senate, Democrats advanced a tax reform package that reduced Maine’s top income tax from 8.5 percent to 6.5 percent for all residents earning less than $250,000 a year. To offset lost revenue, the bill sought to broaden the state’s sales tax to more categories of goods and services and raised the meals and lodging tax from 7 percent to 8.5 percent.
The plan was approved by the House and Senate and signed into law in June 2009.
Republicans, arguing that the proposed changes were too complicated and did little to relieve the tax burden on Mainers, launched a people’s veto.
With more than 60 percent of the vote, Mainers rejected the Democrats’ plan the next year.
All in one day in the headlines,
DHHS is broke, we cant afford Mainecare
Lets make a law to put excess revenue into Tax Breaks!
What a Scam!
These Politicians who sign a Tax Pledge to Lobbyist at the expense of the US Citesens should be prosecuted for Conspiracy and fraudulent behavior in regard to their oaths of office !
Taxes are a tool to fund the needs of the government not a means to get votes for politicians!
lepage and his “R” buddies get caught (again) with their fingers in the cookie jar, Who would have guessed? They don’t know “Nutting”…LOL. Pay attention voters of Maine.
They are attempting to take your hands out of our “cookie jar”. It is a small step towards needed reform.
“Taxes are a tool to fund the needs of the government”
Income taxes are a violation of private property rights and some might argue a form of slavery. There are plenty of other ways the government derives revenue for its coffers, such as the sales tax, luxury taxe, duties, and various fees. The ultimate goal should be an income tax rate of ZERO
Duty rates have dropped an average of 4% in the last 8 years. This Country was built on duty collection, now it is minimal. Low duty rates have also killed millions of jobs, the Government needs to know how you feel, if you want higher duties, please call your Rep.
“Taxes are the tool to fund the needs of the government.” …and government is of the people, by the people and for the people. Therefor by the transitive property taxes are for the people.
If the state is not going to care for its neediest, there is no purpose for the state.
You are an anarchist. Social order is imperfect. The consequence is that some end up with wealth beyond what they can possibly consume and others end up with nothing. Modern society recognizes this and creates a safety net to prevent the social upheaval that accompanies abject poverty. It serves the rich and poor alike to meet the broader needs of the society. This is especially true now when inequality is the worst in our history and when mobility between classes from generation to generation is among the lowest in the developing world.
IN the distant past, more primitive cultures aligned to your world view. This is why when we read accounts of the early times, we see blind and disabled people begging for change in order to eat. We have advanced beyond this ineffective and selfish world view after centuries of relative anarchy. We are better for caring for the elderly, poor and disabled.
A world without shared responsibility is a world devoid of morality altogether. Greed is perhaps the most powerful drivers of human behavior. Only when we resist the urges of this flaw can we see wide spread prosperity. America became the most successful nation the world has ever known by embracing the ideal that we can create the best imaginable society by leaving nobody behind.
The Governor believes the best possible society is one in which the wealthy have the power and privilege and the rest get the crumbs. It doesn’t work. It never has.
Your statements are false and libelous. The Governor does not believe in “power and privilege” leaving “the rest the crumbs”. No one believes that. It is nothing but Marxist-inspired slogans as a smear.
You are a statist and and a collectivist, which is a false alternative to anarchism: A “shared responsibility” of collectivism is not the basis of morality, and rejecting that does not leave the world “devoid of morality”. Morality pertains to individual choices in all aspects of his life, not service to the collective. It is you who would leave people without moral guidance in their choices by confining morality to an alleged duty to serve and forcibly imposing unchosen duties while ignoring any standard for the choices that must be made in life.
Nor is there a lack of purpose to government without collectivism. The purpose of government is to protect the rights of the individual to life, liberty, property and the pursuit of happiness — his own — not to “care for its neediest” by redistributing others’ property. The history of the world that you rewrite was not individualism, but statism and collectivism from the earliest days of tribalism to all forms of authoritarianism. There was nothing “selfish” about that, it is not in anyone’s self interest to be subjugated that way. A moral government does not rule, it protects the rights of the individual to make his own choices in and for his own life, which morality requires of him as a requirement of human life. A government that perverts the justification for its existence and violates the rights of citizens is worse than the lack of protection of our rights.
(((Big Yawn))) Obsessed with Marxist threats? I read enough right there. Moving on….
Taxes are at the expense of the citizens. The founders of this country signed a pledge a lot more sweeping than taxes to free the people from statism. The country was based on the principles of individual rights in the Declaration of Independence, not European collectivism and statism. “Prosecuting” representatives who stand up for the taxpayers is dictatorship.
If this sort of bill passes, giving tax cuts to the wealthiest while help for our neediest goes unfunded, and Republicans are not turned out office in November, it will be hard to avoid the conclusion that Maine people just don’t care about their hurting neighbors.
There are no “our neediest”. No one who claims to care about people should be promoting more collectivism and statism dragging us all down to a lowest common denominator.
Everyone does understand that this bill is part of TABOR? Imagine if your business was forced to run like this:
In 2009, sales were good, and you were able to not only finish in the black, but had some money left over. But instead of putting some or all of that money into a rainy day fund, you forced yourself to reduce future revenue by permanently lowering your prices. It doesn’t matter that your expenses will likely increase – those new low prices will stand.
The next year, 2010, was not as good as 2009, but still you were able to come out a wee bit ahead. Down came the prices again, further reducing your revenue stream.
Oh, oh then 2011 came, and the economy tanked, and even though you cut expenses as best you could, the amount of revenue coming in isn’t as good as in 2009, even though your moving about the same amount of product. It’s those damn low prices!
There is a reason why Coloradans voted to repeal TABOR. It leaves government no flexibility in the face of cyclical economic trends, tying the hands of officials, in much the same way the hands of the business owner above are.
The best part? The sponsor of this bill, David Trahan, is not even in the Legislature anymore, having finally officially quit two weeks ago.
The government in a free society is supposed to protect the rights of the individual not profit off the taxpayers to redistribute their assets. Geral Weinand’s posts have made it clear that he doesn’t want a free society.
Your definition of free society has no room for responsibility. Rights alone do not make for a very satisfying meal. Cries of redistribution enable the continuation of the redistribution we have witnessed in the harsh reality of the last decade. I agree that government should not serve the interests of redistribution, but is has and in its present form, it does just that.
If all had equal opportunity to share in the wealth generated by our natural resources, you could argue your case more emphatically. It is not this way. The natural resources are exploited by a few and used to impoverish the many. Your position ignores the built in inequality that our economic systems are built upon. It is not as if the poor have squandered the wealth and brought about their plight. Being poor is for many bestowed from birth and perpetuated by diminished access to the things that can change circumstances, such as good nutrition, health care and education.
If you are worried that the poor are going to take what you have your fear is entirely misplaced. There are such threats but they do not come from the poor. Have you seen how far Wall Street is willing to go to make the next buck?
There is no duty to serve the state and the collective. Wealth is produced by individuals using their minds on behalf of their own lives, not effortless “exploitation” of “natural resources” that are of no use to anyone when not extracted and developed for human purposes.
I know exactly who is taking what I have — the government. People who produce and earn more are not taking from anyone.
Wealth is also produced using the tax payers money and other peoples money in general. You can argue all you want to continue the speculation and margin trading. If they do not get reforms we can expect bailout after bailout. The most egregious redistribution of them all.
When a conservative comes forth to say,”We need to run the state like a business” the left screams that this can’t be done because the state isn’t a business. Then they trot out the evidence that proves the state is not a business. So, you can’t use a business analogy anymore. It’s been deemed irrelevant.
Right. And since the state is not like a business, really, then it certainly can return unspent taxpayer money to the original owners of that capital.
stop the republican’s class war on the people.
Republicans are simple in terms of what they respond to. When they get elected they see this as an invitation to change the entire social contract. When they lose badly in an election, they moderate.
2012 will be the year the republican party learns moderation once again. The Walker recall in Wisconsin will serve as a harbinger of things to come in November. There will be an electoral backlash in most of the country. Class warfare is coming from the right to provide cover for the continuation of the failed policies and institutionalized theft that have defined this century so far.
Obama will have a stunningly successful second term. LePage will have sullied the GOPs chances for control of the government for at least a decade. The people may react slowly, but they are smart enough to see what is really happening. They have every reason to be afraid of what the radical right have to offer for their futures.
There is no “social contract” to serve the state and the collective. Anyone has a right to overthrow the left from government power.
There is no “class warfare”. That is a Marxist fallacy. Resisting having one’s assets seized and redistributed is not “class warfare”. The left is trying to manufacture “class warfare” through an ugly and destructive fanning of envy and resentment in order to destroy freedom.
Still waiting for the proposal to exempt retirees from paying state income tax!
“and then to reduce the highest income tax rate gradually”
So, give the breaks to those who can afford to pay it the most first? Why not reduce all the tax rates at the same time or just the lowest rate first? Oh, that’s right, it’s the R’s paying back those who put them in office.