Following is a piece addressing the new tax bill, LD 1496, that I submitted to the Lewiston Sun Journal. Unfortunately, it did not meet their parameters for publication so I am sharing it here.
In 2009, the Maine Legislature passed, and Governor John Baldacci signed, a major disruption of Maine’s tax code that shifted a massive tax burden onto small businesses and working families in order to support state government’s continued growth unabated.
A wide coalition of Republicans, Democrats, Independents, and Green Party activists gathered the 50,000 signatures required to bring the controversial law to a popular referendum. The following Spring, Maine voters rejected the proposal with a people’s veto by an overwhelming margin of 61 to 39.
As a member of the Taxation Committee, I am shocked to see essentially the same exact omnibus tax hike proposal. The only difference is, this bill is even more regressive and an even bigger net tax increase on Maine people than the one repealed at the ballot box three years ago.
The bill would generate $700 million by increasing and broadening the sales tax to cover virtually everything. It’s designed to bring in more revenue from tourists and people who don’t live here year-round, but let’s take a look at the toll it takes on everyday Mainers.
Currently in Maine, there is not a tax on groceries. With prices rising rapidly over the past several years, it seems to us like the same shopping cart full of food costs twice as much as it used to. This proposal would slap your already-heavy grocery bill with a six percent tax. If your family spends $150 per week at the grocery store, that’s an extra $500 per year coming out of your pocket.
Not only would groceries now be taxed, but so would water and plumbing to haircuts and dry cleaning to home heating oil and car repairs. It increases the cigarette tax by $1.50 per pack and doubles the taxes on beer, wine, and real estate transfers and there would be about a 50 percent increase on car rentals and hotel stays.
In my opinion, this bill creates a “cradle-to-grave” tax state that places a hugely regressive penalty on your baby formula, funeral services, and everything in between.
When the dust settles, we’ll see a sales tax hike of $538 for every man, woman, and child in Maine. That’s $2,700, or about $225 per month, for a family of five.
It is said this is taxing tourists but how much of this $700 million will be covered by out-of-staters? To give you an idea, less than three percent of it will be raised by the lodging tax hike. Fortunately for tourists, they can avoid the tax increases simply by avoiding Maine.
And what do Mainers get in return for this tax onslaught? They get a flat income tax rate of four percent but buyer-beware, the plan eliminates all deductions and credits Mainers currently enjoy. That means no more deducting educational expenses, no more child tax credit, and no more work expense write-offs. The plan also eliminates the estate tax for the wealthy and provides a payment to the towns that spend the most money—not a good incentive for smaller government, if you ask me.
Accounting for tax increases and cuts, the net effect is a crushing $163 million per year tax hike to cover the government overspending going on in Augusta.
The only thing that’s worse than a tax increase is a tax increase that targets the Mainers who can least afford to pay it. Perhaps that’s why most Democrats and Republicans are united in opposing this plan. I don’t believe massive tax hikes are a sustainable solution for Maine’s overspending, and both Democrats and Republicans agree that this package hurts the poor and the middle class—the very people we’re all trying to help.
I don’t believe we need to increase taxes in the State of Maine to balance our budget; we need to reduce government spending at all levels and live within our means. That is what every Maine family is doing, we should expect no less from our government.
I would encourage you each to read LD 1496 carefully and contact your local Legislator to express your opinion.
The bill is scheduled for Public Hearing on May 10th, 2013 at 10:30am in Room 237 of the State House. All are welcomed to attend and provide testimony or following the proceedings live on web.
This item originally appeared on Rep Roger Jackson’s Official Facebook Page.