AUGUSTA, Maine — In a surprising turn of events late Tuesday, the Republican-led Maine House of Representatives rejected a Republican-backed bill that sought to provide income tax relief to Mainers if and when the state has surplus revenue.
The 72-61 vote to reject LD 849 followed significant House debate that began late last week.
The bill goes back for further consideration in the Senate, which approved the bill about two weeks ago.
LD 849 has turned into one of the most divisive battles of the 125th Legislature’s second regular session. As written, the bill increases the size of the top income tax bracket and then gradually reduces the highest income tax rate to 4 percent.
Republicans say it simply gives money back to the taxpayers, something that didn’t happen in the 1990s, the last time Maine had a surplus.
“With every dime we had, we expanded programs,” Rep. Lance Harvell, R-Farmington, said during initial debate last week. “When we have surpluses from now on, let’s look at giving it back, not taking it.”
Democrats argued that the most wealthy Mainers will benefit and said LD 849 would give money back to taxpayers before state programs are paid for.
Rep. Donald Pilon, D-Saco, who serves on the Taxation Committee, last week called the bill “irresponsible” and “bad public policy” that binds future legislatures.
Rep. David Webster, D-Freeport, added: “It’s like if someone wins a scratch ticket for a down payment on a fancy new car even though they know they may not be able to make the payments that are coming up in the future.”
The March 18 party-line vote in the Senate came after an amendment offered by the bill’s sponsor, Senate Majority Leader Jonathan Courtney, R-Springvale. That amendment called for excess revenue to be used first to fully support the state’s underfunded circuit-breaker program and then to provide tax relief.
The House was expected to follow suit with a similar party-line vote but that didn’t happen.
During floor debate late Tuesday, it was mostly Democrats who spoke.
Rep. Bruce MacDonald, D-Boothbay, said everyone wants lower taxes but the impact of this bill is enormous. Rep. Alan Casavant, D-Biddeford, said the bill would shift tax burden to property taxes, which he called the “most hated tax.”
Rep. Robert Duchesne, D-Hudson, urged lawmakers to table the bill long enough to bring its contents back to their constituents.
“Then you can quietly commit this bill back to committee next week, where it can be gently smothered with a pillow,” he said. “Nobody needs to know that we actually discussed skimming 40 percent of the money that was supposed to pay our debts.”
Many Democrats had viewed LD 849 as a backdoor attempt at adopting a “taxpayer bill of rights,” an idea that twice has been rejected by Maine voters in the last decade.
Rep. Seth Berry, D-Bowdoinham, the lead Democrat on the Taxation Committee, said the public never had a chance to weigh in on the bill in its current state because it was rewritten in committee.
“This let us take political credit now and let others make tough choices on how to pay for them later,” he said.
Reducing income taxes without accounting for the lost revenue elsewhere had the potential to create big holes in the state budget, but Courtney said it forces lawmakers to look hard at spending.
“There is enough money for state government without those high income taxes,” he said after the Senate vote.
It’s not clear what will happen to the bill going forward or whether it can be amended to secure enough votes for passage in the House.
Many expected LD 849’s passage to be a talking point for lawmakers leading up to the November elections, particularly about who stands to benefit most from the tax break.
“These are always interesting debates because numbers can be confusing,” Rep. Gary Knight, R-Livermore Falls, House chairman of the Taxation Committee, said late last week. “Those on the top are getting the biggest break, but they are paying the greatest percentage.”
Rep. Walter Kumeiga, D-Deer Isle, countered that this bill only affects income tax, while Maine families pay a lot of other taxes. Taken cumulatively, he said, low-income people are affected disproportionately.
Follow BDN reporter Eric Russell on Twitter at @BDNPolitics.
Since LePage has so little faith in his own proposed changes he refused to stay in the country to negotiate, why would anyone else want to support it?
Many,many of us support him and that is why he is the governor. By the way why haven’t we seen an approval poll regarding Gov LePagae lately? Just maybe the liberal control freaks in this state have done one and couldn’t handle the results.
I would say that there are no polls that favor Lepage and that’s why you arn’t seeing them.
The Republican’s have plenty of ways to get the word out on any polls that favor them. Including the GOP propaganda machine at Fox and the Neo-nazi’s at Maine wire.
I do not listen to FOXnews, but thanks for telling me about Maine wire. Hope it’s conservative.
Maine wire is the propaganda arm of some Wall st bankers who helped finance Lepage.
Yeah, keep searching until you find news you like. Reality be damned!
I think you mean you hope it’s biased…
We should read all view points.
it’s radical conservative….the place where FOX cultists can get more of the same GOP liars club propaganda.
Just checked out Maine Wire it’s great! http://www.themainewire.com/
Get the MHPC to do one. My guess is they won’t because they won’t like the results…..
This was an excellent idea, I’m disappointed it didn’t pass. A decade or so ago, when the Maine economy was booming, people’s increased incomes caused millions more in income and sales taxes to be paid to Augusta. Whet did Augusta do with the money? They spent it of course. I believe it was during Angus King’s 8 years as governor that Maine government spending averaged double the rate of inflation for the 8 years. This legislation would have made sure that runaway spending like that wouldn’t happen again. Politicians like to spend other people’s money. When they have extra they don’t know what to do with, they find new ways to give it away. Then, when the economy turns bad, as in the past 5 years, the State cannot afford all the giveaway programs they have started. Then everybody has a sad story to tell.
The park service doesn’t want us to feed the wild animals for fear they will forget how to fend for themselves. Too bad we don’t apply that logic to people. If you give away too many free rides, people forget how to fend for themselves.
“I believe it was during Angus King’s 8 years as governor that Maine
government spending averaged double the rate of inflation for the 8
years.”
I hope people remember this statement at election time as well as the spending that took place during that period when King was Governor.
It remains to be proven as true or do you guys automatically believe anything posted by lame GOP right wingers.
How many free rides are unwarranted? Do you guys think they are all freeloaders who don’t work because they choose not to? Do you think they are all Democrats? Do Republicans have magic powers that allows them to figure out who an unwarranted freeloader is by just looking at them? You guys like to blame everything on the poor and the elderly, but you don’t know even the extent of fraud and just ASSUME they are all deadbeats living off from Republican tax dollars. You guys worry so much about the few pennies in your taxes each week that go to the poor and the elderly, but don’t give a damn about the big government corporate giveaways, tax breaks and subsidies. Get informed and be consistent please.
“One of the last states to have a tax rate as high as California is proposing
was Delaware in the 1970s. Its rate hit 19.8%. Then-Governor Pete du Pont cut
the rate to 10.3% in 1979 and later to 5.95%, and after five years the state’s
revenues had nearly doubled and its credit rating went from the worst to one of
the best.” Excerpted from WSJ Editorial 3-26-2012
I for one, am happy it did not pass. Too many Maine children (18-24% depending on your source) live in poverty. We can do better for our future (our children) and our elderly; I propose a top tax rate of 12% and a minimum tax of 5 % across the board for all Mainers. I’m willing to pay more.
You might be but others need to be forced to do the right thing.Greed is dead.
Have you noticed how we seem to spend more and more on programs while the poverty rates only increase?
Nothing is stopping you from paying more. As for me I will go with Warren Buffett who when asked why he doesn’t voluntarily pay more taxes said, “I think on balance, the Gates foundation, my daughter’s foundation and my two sons’ foundations will do a better job with lower adminstrative costs and better selection of beneficiaries that the Government.”
What a stupid non-argument. It doesn’t work if only one person does it. That’s like saying, well, you want a war in Iraq? Nothing is stopping you from going over there and fighting yourself.
What you’re saying makes no sense.
So an individual can do nothing and it’s up to the government to do everything? Right there in my post are two people (Bill Gates & Warren Buffett) who have gone out and done something both in business and in their charitable giving. If a person thinks they don’t pay enough taxes or afre willing to pay more then they can take a trip down to their local shelter, food kitchen, assisted living facility etc and make a donation. They can put their money right to work without processing it through the government. While they are there they can also voluteer their time. Maybe become a mentor to someone. One person contributing or voluteering does make a difference. It is certainly more productive then wringing one’s hands over who does or doesn’t pay enough taxes.
Why not address my comparison?
Do you tell those advocating for more Defense spending and more wars to get out there themselves? Or do you only inconsistently apply that kind of logic?
Also, should all taxes be then voluntary?
It is an article on taxes and thus my replies related to taxes and the person’s claim that he/she is willing to pay more taxes. Why did you wish to divert the attention away from taxes? As to your response many joined the service including my son. I have organized and sent packages to our servicepeople overseas. Again individuals can make a difference in many areas.
It’s a comparison in order to point out your stupid logic. I didn’t say an individual can’t make a difference, I said that’s not how things like taxation and Defense works. These things work when we do them collectively as a country.
With 46% to 49% of people not paying federal income tax I guess some taxes are more collective than others. Nothing illogical in pointing out to someone who says he is willing to pay more tax that he can volutarily pay that tax or contribute to something in the community that the government would otherwise have to pay for. Of course the poster I responded to would like to raise the top rate to 12% and have a minimum 5% across the board for all Mainers which would raise the income taxes significantly for the poor and middle class and you saw nothing “stupid” about that.
First, that number is only that high because of temporary tax credits and cuts, most of which were a part of the stimulus package.
And yes, it is a stupid point to say that anything an individual supports, he/she ought to take the initiative on his/her own. That’s not how taxation works. It’s not a voluntary determination of individual people.
When someone advocates closing unfair tax loopholes, would you tell them just not to use them themselves? No, because that doesn’t solve the problem. That’s not how things work.
You’re just acting stupidly. I have clients who have objected to tax deductions and/or credits. I have one who will not take an itemized deduction for contribution to a church and I have several who will not take an Earned Income Tax Credit.
Good for you, but it still remains that that is not how tax policy works. It’s a system, not an individual’s doing. Period.
Note that as tax rates went down in Delaware revenues nearly doubled – connect the dots: revenues doubled because economic activity grew exponentially as tax rates declined. High taxes have this funny way of stifling the revenue generating machinery that is essential to providing for the less fortunate. Over the long run higher taxes only hurt those most in need of help.
And no, I really don’t think we need big brother :-)
By eliminating regulations, Delaware has become a corporate headquarters haven. So if you want business to come to your state, lure/bribe them in by eliminating regulations and taxes.
I am glad people are finally seeing that Lepage’s budget proposals are shifting state costs onto local communities and do nothing to reduce state spending.
Absolutely. LePage and the GOP = incompetent abusers of power.
It is not abuse of power it is putting the power back to the taxpayer. Liberals are control freaks, they believe they know what’s best for everyone. They are now freaking out because people are standing up to liberal bullies.
You’re brainwashed with crazy Republican indoctrination. The bullies are the GOP trying to control our lives.
Maybe if the tax burden gets shifted to the local level, people will have more of a desire to make local government work rather than have a board of selectmen spend their tax dollars for them. If more people would get envolved at local level you might be able to change the spending attitude at the State and Federal level of government.
As the state is run it is only a matter of time before the tax burden shifts to the local level; that’s why I advocate across the board tax increases.
What will happen when all these rural towns that have long ago lost their tax base are forced to fully pay for schools and indigent care etc. ? Will the state take property tax funds from larger towns and redistribute it to smaller towns like New Hampshire does?
If that is the Maine Heritage societies plan for us then shouldn’t we be told?
‘We the people’ are going to end up paying for everything in the end anyway. When we pass the money on up the line to the State or Federal level, we just subject our funds to greater extractions in the name of administration. That’s how a $100 job becomes a $1000 job. You don’t get more for your money when you send it off to strangers to spend – you get less for it. Plus, you lose control over it. Bad business, indeed.
When spending goes back to the local community people have more control on how their hard earned dollars are spent. The further away from the tax payer money goes the less control they have. That is why liberals want federal control and not local control.
I agree with you in principle but I want to know how these smaller cities and towns will pay for their schools and other mandated spending with the tiny tax bases they have.
Lepage keeps pushing state costs onto local property tax payers and insurance premium payers. That does nothing to lower state spending especially since Lepage’s budget is 1/2 a billion dollars bigger than Baldacci’s was.
First off we need to eliminate mandates. We need to trust people to take care of needs that they see are necessary. Look what happens when someone has property fire the community comes together and helps. We also it when someone has an illness, again the community comes together and has a bean supper.
A bean supper will not cover the costs for Schneider’s wheel chair much less the hundreds of thousands of dollars we have paid since he crashed his car.
Are you aware of the markup on medical equipment because of insurance? Plus the greedy medical supply companies are bilking the states for reimbursements. Eliminate insurance and you will see the cost of the wheelchair cut in half.
I would very much like to see a “single payer” option available for all American’s but Unfortunately we live in a country that is controlled by a hand full of families and they will not give up one nickle to save America even if we were on fire.
I don’t, it would be controlled by the pharmaceutical industry, plus people love their pills. Avoid going to the doctor unless truly necessary. I like having control over my health care and how I want to be treated. The best thing people could do for themselves is watch what they eat and get regular exercise (walking is free).
Prevention is the best and the cheapest but thing happen despite our best intentions and we all have an obligation to help one another.
Eliminate insurance and doctors and hospitals go out of business and bankruptcies skyrocket. Bad idea.
Sounds good to me.
We wouldn’t have mandates, laws or regulations if we could trust people to do what is right and even with mandates, laws and regulations now, people are still trying to get around them. People and corporations can’t be trusted!
https://fbcdn-sphotos-a.akamaihd.net/hphotos-ak-ash3/554577_10150701569964805_376185864804_9203991_773830659_n.jpg Local control can be warlords or fiefdoms. Often it’s whoever can pull the most strings to serve their own greed.
Phrased another way: The Maine House has supported the notion that tax revenues are just that: revenues justly due to the State.
We can never hope to achieve fiscal responsibility by viewing tax revenue as a gift to be returned if the State manages to manage it’s finances better than it anticipated.
I pay my fair share. If there’s something left over because my government does better than expected, it should be carried over to the next set of priorities.
How much tax have you actually paid to the State of Maine?
“Sniff”…..”sniff”……I smell non termed out republicans worrying about their next election….
What we need the most is more turned-out Democrats. Oh, wait! You said “termed-out”…
I did; and guess what, there’s more republicans terming out this year (5 to be exact) than there are democrats. Have fun in November.
I am very disappointed that this did not pass the working people need a break for once.
The break wasn’t going to the ” Working People ‘ it was going to the Richest People.
I know a lot of “Working people” who are making over $19,950…. which would put them in the 8.5% bracket… And with a Federal poverty line at $22,350… might wanna redefine “Richest People”…
The socialists among us continually lower the bar defining ‘richest people’ and constantly raise the bar defining ‘poorest people’. They will be happy only when the misery is equally divided. Remember that: Capitalism is about profits, Socialism is about misery.
Socialism is about equality, capitalism is dead.
If that’s what you want I’m all for it. While you’re at work I can spend your money. Now that’s equality !
Try selling that to the Russians! 74 years of trying to make Socialism work and they failed miserably. Even killed tens of millions of people, and it STILL failed. It. Doesn’t. Work.
8.5 % of 20,000.00 over the threasold from working the second job is $1700.
8.5% of $1000000.oo made sitting at home watching the Stock Ticker is $85,000.
That is for a family of four.For a single person it is $10,890 and adding $3,820 per person.
Or to put it another way,four single people can live on Lauren LePage’s salary.Maybe the R’s are running scared now.
That is taxable income. You have to add deductions (standard or itemized) and exemption amounts to arrive at the income at which the 8.5% bracket starts. For this year the 8.5% bracket starts at $29,150 for single and for a family of four it starts at $64,000.
Lots of people like your post, but it’s inaccurate. You are forgetting the standard deduction and personal exemption – so the highest rate is hitting quite a bit above your cutoff (more like $29k) -which still isn’t rich. More like $50K for a family of four.
Bottom line is that the more income you have, the more you benefit from this tax cut – so you might wanna work on your accuracy.
Just like the Bush-Cheney tax cuts, the vast majority of the money will go to the most well-off amongst us and the shift to local taxes to make up the difference will put the onus on the “working people”.
If you don’t make substantially above $50k, you are arguing against your own interests.
But while the Bush tax cuts largely benefits the wealthy, it is still a cut that is applied proportionally (as opposed to let’s say a credit that is flat and just accross the board). Here however, the cut would disproportionately benefit the top bracket.
A family of four making $40,000 in 2001 paid federal income tax of $1,924 in 2001, in 2010 they paid no income tax and they received a check for $2,523 for a tax cut of $4,447. ($800 of that was President Obama’s make work pay credit). There are substantial tax cuts for more than the wealthy in the Bush tax cuts and there are more cuts in the Lepage tax cuts passed last year than the cut in the top rate though you will rarely hear about them in the press.
I wouldn’t hurt to remember that the ‘richest’ people are the ones who get slammed the most when taxes are collected in the first place. What on earth is wrong with giving them their money back, at least partially? Since when is it a crime to be a good earner? You make it sound like a crime against nature.
Since when is it crime to be poor?
“Slammed”? None of us like to pay taxes, but the notion that high income people are “slammed” by taxes is bizarre. A person who is “slammed” by taxes is the single mother working two jobs at minimum wage having to pay a big tax on gasoline to get to and from her jobs and home. In other words, someone who has little, or in many cases, no, discretionary income; it all goes to pay for basic living expenses.
To pay taxes, high income taxpayers feel the “pressure” of lowering their consumption of luxuries or reducing large financial “stockpiles”. They already had a big relief from that “pressure” at the federal level.
LePage should make it a priority to cut spending, then discussion can ensue regarding where to cut revenues and provide “relief”. Instead, he gives his fellow high earners yet another bonus, even as wealth disparity continues to grow.
Both left and right wing are unreasonable, but the greed and self-centeredness of the right has clearly swung to the point of making the left look more reasonable than the right. But hey, “get while the gettings good”. Hope your pockets are full and overflowing!
” A person who is “slammed” by taxes is the single mother working two jobs at minimum wage having to pay a big tax on gasoline to get to and from her jobs and home.”
A single of mother of two making minimum wage is not paying any federal income tax and would receive a check for $7,436 when she files her 2010 federal income tax retrun. That is on top of any other benefits received.
Bet this was the plan all along……
It’s about time the legislature did the right thing. Since it wouldn’t take effect till the next biennium budget, what’s the rush? Oh, LePage has to rush through as much damage as he can this year since he will not have a majority legislature after November.
They won’t continue to do the right thing unless we watch them like hawks.
This shows that the Republicans are not really interested in lowering taxes. They attack the teachers own pension fund because the MEA supported a democrat for governor, period. The Republicans want more and more money to spend just like almost all politicians do, they just do not want to meet their promises with that money to teachers.
They have already lowered you income tax starting 1/1/2013 through a bill passed last year.
Reply— to; JoePilot
There is a group in the Government that have signed a pledge not to raise Taxes.
Now they want to add to that a bill that “Automatically” Lowers Taxes.
This is an auto pilot with a one way destination to a crash site!!!!
Wait. Do I understand this right? The Republicans who are DEMANDING that nearly all social services be cut or flat out eliminated. And SAY they are working to reduce the States expenses and costs to save tax payer money. And now they are REFUSING to allow possible surpluses to go back to the tax payers??
That right there tells me they want to take money from Social programs and reroute them to “PORK” projects! And too their friends for “SPECIAL INTEREST” projects!! If the cuts are not meant to save tax payers money. Why are we doing the cuts? Cutting programs, and then rerouting the money somewhere else is not saving tax payer dollars! It is not reducing state spending. It’s just shifting it somewhere else. And obviously it’s not going to go to social programs. So what’s the money going to be spent on??????
It’s all smoke and mirrors, and, once again, the tax payers in the middle get shafted. Oh well, lucky us, we get to live in the MOST RURAL state in the nation. More taxes, less services.
Are they trying to lose in November?
The scumbag Republican leadership just wants us to believe they wanted to give us tax relief. If they REALLY meant it, they would have passed this in the regular session when they only needed a simple majority.
Kevin Raye and Bobby Nutting are trying to game us.
They have already passed tax relief for you last year.
As long as there are taxes, there is no relief.
Wow they are finally showing some common sense pay the bills and then worry about giving back not give back then raise taxes
Sounds as though the D’s are still in control–too many R wimps do not stand up for the RIGHT
“A decade or so ago, when the Maine economy was booming,..” A decade ago Republicans said the economy was a wreck in Maine. Now it was booming.
This bill was completely irresponsible without any redeeming feature. Its defeat is the first rational act of this legislature.
A family of four making $40,000 in 2001 paid federal income tax of $1,924 in 2001, in 2010 they paid no income tax and they received a check for $2,523 for a tax cut of $4,447. ($800 of that was President Obama’s make work pay credit). There are substantial tax cuts for more than the wealthy in the Bush tax cuts and there are more cuts in the Lepage tax cuts passed last year than the cut in the top rate though you will rarely hear about them in the press.