I was saddened to see that before the fall campaign starts in earnest partisan Democrats are running TV attack ads against Sens. Nichi Farnham of Bangor, Chris Rector of Thomaston and three other GOP senators. The ads allege that these senators were a rubber stamp for the governor, claiming they voted for “tax cuts for the rich,” while implying that Democrats opposed them. Neither suggestion is true. I know. I was there.
Most folks don’t care much about party labels. They expect legislators to work together in a bipartisan way. Let’s face it — our individual income tax rates are among the highest in the country, hurting our ability to compete in attracting the capital investment needed to create the good-paying jobs we all want. Recognizing this, we began the process of lowering those rates. The process started with a proposal from the governor that was modified through a series of public hearings and work sessions in both the state taxation and appropriations committees.
Now, in the silly season of political campaigning, some partisan Democrats seem to have amnesia, forgetting their involvement in passing these cuts every step of the way. The tax reform package we passed was unanimously approved by the appropriations committee. In the Senate, the proposal received overwhelming 29-5 support from both parties, including the Senate Democratic leader. The result in the House was similar, 123-19.
The impetus for tax cuts came from Republicans, but the wisdom of these changes was recognized by reasonable people in both parties. It is absurd that some are now attempting to rewrite history for political gain. So did Democrats and Republicans overwhelmingly vote for “tax cuts for the rich”? We did no such thing. We passed the largest single tax cut for the middle- and low-income earners in Maine history.
Previously, there were four income tax brackets: 2 percent, 4.5 percent, 7 percent and 8.5 percent. The top rate kicked in at only $19,950 of taxable income for individuals and $39,900 for a married couple filing jointly, punishing the incentive to work. The new law consolidates and eliminates three of the brackets into two, creating a new 0 percent bracket, a flat rate bracket of 6.5 percent, and reducing the top bracket to 7.95 percent. We also increased the personal exemption from $2,850 to $3,700.
With the creation of the new 0 percent bracket, 70,000 of our lowest income workers who were previously paying taxes will now pay no state income tax. This will allow them to spend more of their hard-earned money to keep pace with the rising costs of basic necessities.
Most notable is the fact that “the wealthy” now pay 55 percent of all income taxes collected. With the changes we made, they will now pay 57 percent of all taxes. Again, this is not tax cuts for the rich. It is a tax cut for everybody, weighted toward lower- and middle-income earners.
Readers and reporters should cut through the election-year class warfare language and look at the facts. For example, those earning between $14,400 and $20,500 will see a 46 percent reduction in their taxes. Between $21,000 and $35,000, taxes go down 20 percent. By contrast, high-wage earners will see only an 8.4 percent reduction.
Still not convinced? The nonpartisan folks at Maine Revenue Services agree, saying “taxpayers at the bottom and middle parts of the income distribution will receive a larger percentage change in their income tax liability compared to upper income taxpayers. On average, the income tax represents an estimated 10.8 percent reduction in individual income tax liability for Maine residents. Maine middle-class families can expect a tax cut closer to 15 percent, while taxpayers representing the top 10 percent of Maine families are estimated to see a reduction of 8.4 percent.”
For thoughtful legislators like Farnham and Rector, service in the Legislature is about trying to improve our economic climate, preserve our unique natural resources and allow our hard-working citizens to effectively compete in the global economy. Lowering our uncompetitive tax rates and keeping more money in the hands of working people must be part of that plan. I am proud of the bipartisan work we have done so far. People should thank Farnham and Rector for helping make this happen.
Sen. Roger Katz chairs the Government Oversight Committee and is a member of the Appropriations and Financial Affairs Committee. Katz represents Maine Senate District 24, which includes Augusta, China, Oakland, Sidney and Vassalboro.
Sen. Katz:
Is it true that those in the lowest income bracket realized an average tax savings of $9 a year under the Republican plan? That would those earning less than $14,427 a year.
And those folks that you mention, the ones earning between $14,400 and $20,500 that will see a 46 percent reduction in their taxes. Doesn’t that equate to just $39 on average? Please explain how $39 a year is going to significantly change these peoples lives.
And one last point – these folks earning less than $20,500 a year. How many of them would lose health insurance coverage via MaineCare, the state’s Medicaid system, due to the cuts that you and your party want to implement? How many working mothers with two kids earning $26,000 a year are going to lose their health insurance because of your cuts?
You missed the point. The tax reform was bi-partisan. Also, the “wealthy” will pay a larger percentage of total tax. Only the extreme left think they have unlimited ability to confiscate income someone else has earned.
Weinend didn’t “miss” anything. He simply noted that, lost in Katz’s opinion column, some people of limited means will not be getting health insurance coverage due to the cutting of taxes.
He also duly noted that the higher percentage of tax cuts for those of little means amount to very little in comparison to the lower percentage of tax cuts – if I make $100k and you make $20k, I might get a $500 cut and you might get a $50 cut.
Only the “extreme right” is concerned about others’ confiscating the money, when in fact they are the ones who actually have been confiscating from the rest of the population in the first place. And don’t give me your B.S. about “working harder” because I don’t have to work nearly as hard as I did when I was a young man, yet I make FAR more money than I did when I was working harder, and each dollar of increased compensation comes far EASIER than it did when I was not as efficient at “confiscating” from others. Look at our bankers who generated the derivative schemes, one of the primary reasons for the current financial morass – they got to keep all of their bonuses that they originally “derived – or confiscated”, then got more bonuses for “fixing” the problem. Look at our wonderful hospital administrators who cut jobs and then had the “savings” put into increased salaries and bonuses.
You are the one who is “missing the point”. The people with the money are the “confiscators” and that includes me, and probably you. So just shut up about “confiscating”, and actually go out and take a look at people who work hard, make very little money and then get belittled by privileged toads for not ” working hard”.
Bizzare viewpoint. If someone earns more than another person they are “confiscating” money from everyone else. You Democrats are really going too far.
It’s the ‘new’ obama democrat party! Get used to it.
“Detailed estimates from the Congressional Budget Office — which only go up to 2005, but the basic picture surely hasn’t changed — show that between 1979 and 2005 the inflation-adjusted income of families in the middle of the income distribution rose 21 percent. That’s growth, but it’s slow, especially compared with the 100 percent rise in median income over a generation after World War II. Meanwhile, over the same period, the income of the very rich, the top 100th of 1 percent of the income distribution, rose by 480 percent. No, that isn’t a misprint. In 2005 dollars, the average annual income of that group rose from $4.2 million to $24.3 million.”*
While worker productivity has vastly increased over the past few decades, worker pay has increased very little, and millions of workers have been laid off to jack up corporate profits. Meanwhile, the ultra-rich have seen their already vast incomes nearly quintuple.
The ultra rich demand tax breaks, always promising that they’ll start creating jobs any day now. Workers have been persuaded that it’s vital to slash social services in order to pay for those tax breaks. Yet any new jobs keep appearing overseas instead of in the US.
Republican leaders tell us we middle class folks can have some tiny tax breaks, as long as the millionaires and billionaires get huge tax breaks. They supposedly make their money by “working.” Like playing the stock market? Tell me exactly how much harder a millionaire is working than a telephone lineman or a police officere or a firefighter, to justify getting nearly 5 times as much pay these days as before.
Class warfare has been under way for years, the ultra rich have won, and any non-wealthy person who points that out is accused of “envy” and a desire to confiscate. Ridiculous.
*http://www.nytimes.com/2011/09/23/opinion/krugman-the-social-contract.html?hp
So what? The money I earned, no matter the legal method, is mine. It is not yours nor does it belong to the fellow down the street. I am not “confiscating” anything from him because he may be unemployed.
You sound as if you think money is a zero sum game, a finite figure. It isn’t. The sooner people understand how money works, the sooner people won’t be making stupid arguments like the one posited above.
There is a sense in which this scenario does behave like a zero-sum game.
This week, you have an employer whose income is only 5 times yours. You have enough to live on. Next week, your employer, who has thousands of employees, slashes everyone’s wages to poverty level or below. The employer’s income is now 30 times your own. And he has done nothing illegal, I agree.
You cannot form or join with other employees to advocate for better pay–you’ve been trained to despise unions, and theyre increasingly in short supply. So your choice is to live in poverty or quit.
Quitting is impossible, because the employer has helped rig things so unemployment rates are high and there is incredible stigma against receiving unemployment compensation. You know that if you do find another job, it will probably be with a company that uses identical tactics. If you can’t find another job, social services are being slashed everywhere and you will not only be stigmatized as a lazy couch potato but will have little or no access to food, shelter, or health insurance.
The employer is busy whining that he needs special tax breaks–yes, he’s had these for many years and not created jobs, but this time he really, really will create more jobs. (He stands in for Lucy holding a football for Charlie Brown every year.) The cost of giving millionaires tax breaks is that less revenue comes into state and federal coffers, creating a trumped-up rationle to keep slicing social services.
The radical right’s efforts to polarize working people has been so successful that you, though suffering with low wages, feel you have two choices: 1) identify with millionaires or 2) identify with the poor people you have been taught to despise. Naturally, you identify with the ultra-rich, and stand up for them at every opportunity.
Your rant has nothing to do with previous discussion. Foolish really. Money is not a zero sum game.
“If someone earns more than another person they are “confiscating” money from everyone else”
Yes!
The Game is Rigged!
Gerry, It’s easy to toss others under the bus when you don’t have a stake in them. Look at the GOP/TP. They’re perfectly willing to see Bush taxcut’s go on forever provided they get their unlimited income tax break’s that they know dammed well no one else is going to benefit from. Same for the Overseas Repatriation Tax Act. Both the GOP and the TP are fanatical, to the point of a suicide bomber, in getting this tax repealed, if not outright eliminated, just so they can bring more money back into the Country that’s going to do nothing more than sit in a bank vault or on some balance sheet. Some have called for a compromise of the current Tax being stepped down from the current 35 % to a modest 25 % and that 25 % be split between the ACA funding and the current deficit crisis. But does this interest anyone in the GOP or the TP, NO. All they want to do is sit and throw a temper tantrum, screaming about the unfairness of it all. People, GET OVER IT and move on. Selective amnesia, no. But there are far too many here that are showing signs of selective greed and arrogance. The time is coming, and Mitt’s just lit the fuse for the party to begin.
Your president keeps signing the tax cut extensions. He has ownership in the process now. If you don’t like it, get the chosen one to let the tax cuts sunset.
Sir, ‘The Chosen One’ as you call him is the GOP’s major mouth piece, that being McConnell. Everytime the tax cut’s come even close to being amended toward anything like a raise from the current 250K to a more realistic indexed 500k, good ole’ Mitch and Company, including Grover’s Commando’s, come in and start threatening any Moderate GOP member, of ether House, with all kinds of nasty and stupid thing’s. And the more that this type schoolyard bullying and spitballing keeps up, and with the media now in full ‘attack dog’ mode courtesy of Mitt’s desperation to secure the nomination by embracing these types politician’s like Ryan, who love to threaten those most vulnerable just to get his ‘jolly’s’ off, the quicker the public is going to see just who’s blocking progress. There is an old adage in Presidential politic’s. You pick your running mate after the Convention for the election, you pick your running mate at the Convention to win the nomination. But you pick your running mate before the convention it means that you’re trying to shore up your base since who ever is running is showing serious signs of not getting their message across to even the faithful of the Party. Mitt’s feet of clay are showing and Ryan, and his position’s, are supposed to be the cure ? Kool-Aid time !
Last election cycle, McConnell just barely survived election by a 3% margin. His re-election didn’t get much media attention back then. But given the media’s current repeated question’s about his backing Ryan’s plan to both cut Medicare and Medicaid (and we here in Maine are getting a pretty good preview of how that’s gonna work out given LePage’s current statement’s) and then take whatever is leftover and turn it into a State program, with voucher’s, the more that these proposed programs are gonna get looked at and examined, they are going to be seen for what they actually are, that being PRIVITAZATION OF THE ENTIRE CURRENT SOCIAL SECURITY SYSTEM ! Please, if this is the best that the GOP’s got to offer then do us all a favor and start seriously about your 2016 campaign now ’cause this one’s ship has already sailed.
Since every single recent democrat policy has been proven a failure, attacking is all they have left.
It is refreshing to see there was some bi-partisan work done.
But, minor savings in tax cuts aren’t going to help. Buying a tank of gas, a prescription, or food for one meal can eat up the savings quickly. And schools, roads, and bridges aren’t going to get cheaper.
Unless the Governor has a nice surprise for us.
“Unless the Governor has a nice surprise for us”
Increased Property Taxes!
The purpose of the ad was to show how those Senators rubber stamped everything LePage wanted. Katz is trying to turn it into an argument about taxes when it was about 5 tea party parrot republican Senators who did exactly what LePage wanted them to do each and every time. Nice try on deflection Roger I am sure your base will love it. Thinking people…….hmmm…. maybe not so much.
Senator Katz!
We are on to your game of comparing apples with oranges and saying that we need to come in line with other states while the gop goes to the next states and claim that they need to come in line with state as well. The common denominator is always less tax and Spending for those at the Top of the food chain.
Those who bought the GOP!
The Most Notable is the sales tax exemption for the Aircraft Industry that you guys said that we needed to come in line with other states in order to compete. Lets face it, as soon as that went threw the GOP goes to the next State and says ,LOOK! ” We have to be like Maine in order to compete” Do you really think that we are so stupid that we don’t see through such a Phony Scam?
It’s not only the States but other countries as well!
We are forced to compete with Communist China and your ilk like West down in Florida have the gall to call Democrats card carrying Communist!
We have heard enough about lowering taxes to help the job creators and how they pay so much more of the tax burden, how 50 % of the population pay NO income taxes!
Let me tell you something Mister!
Those job creators don’t pay one dime of Income taxes until after the operational costs of their buisness is paid for!
People need to be treated the same as a piece of Machinery!
They should not pay one cent of tax until their income exceeds their “Operational” cost or subsistance !
25-9 and 123-19 is Hardly Bipartisan and only shows nothing more than the fact that Democrats are at least willing to comprimise where as the Republicans truly are just a bunch of rubber Stamps for the Governor and the Heritage Foundation.
Chris Rector?
Rubber Stamped the Assault on Workers Compensation!!!!
!
Good bye, So Long, Republicans!
Never to return and vote for you again!!
Hee , Hee , Hee…Take another sip of Koolaid and relax..With candidates like Mitchel and Dill as the new face of the democrats I’m sure you will go far…Hee Hee…
Could someone please point out a period of American prosperity that can be tied to a tax cut? During the sixties when the 1%ers were taxed at the max rate, we had the greatest prosperity.
What did the Bush tax cut get us? Just the greatest economic collapse since the depression of the 1930s. Sure, it didn’t help that the repubs also pushed a tax cut and spend agenda with the pointless Iraq war and prescription drug plan that gave billions to drug companies and a doughnut hole to seniors.
Romney has ofered nothing new, just more of the same supply side BS that crashed the economy in 2008. If he gets in, our only hope is that he flip flops again and stumbles into a decent idea. For now, I’ll stick with Obama, even though I keep hearing that he didn’t clean up after Bush fast enough.
The author is a friend, but this entire op-ed is wildly off-base and extremely disappointing.
The first glaring omission is to look only at income taxes, NOT including sales and property taxes. The second is to detail only ONE of over FIFTY tax-related measures enacted by the 125th Legislature and Gov. LePage – and many on entirely partisan votes. The simple and sad truth is this: lower and middle income families will see a NET TAX INCREASE in the hundreds. The wealthiest 1% (who bear the lowest burden already) will see an additional tax cut in the tens of thousands. Those in the middle who pay the highest burden will be asked to shoulder even more, as those who pay the least towards Maine’s shared investments will pay even less.In addition, the state’s budget will be drastically unbalanced as less than a tenth of the cuts described have paid for by the shifts enacted so far. FMI bhamberry.blogspot.com – Rep. Seth Berry, Lead Democrat on Taxation Committee
You didn’t build that and you didn’t earn your money. It is the property of the government. Democrats should decide who gets to keep their money and how much of it they should be allowed to keep.