This paper’s recent editorial “Legislature should not rush tax reform bill” (March 20) was too quick to dismiss our plan and the taxpayer concerns that generated it.

L.D. 849 sets a goal of gradually reducing income taxes paid by Maine citizens. It is only triggered when the economy improves and there are extra revenues over and above the budgeted needs of state government. Extra revenues go into a fund that is used to gradually reduce the highest income tax rates over time until the maximum rate is 4 percent.

A similar version of our tax plan was enacted into law in 1995 when Republicans last held a majority in the Maine Senate, and repealed by Democrats two years later. Recently, former Gov. Angus King was asked by Pat Callaghan of WCSH-TV (Channel 6): “What, if anything, would you like to do over?”

He responded by citing late Senate President Jeff Butland’s law to reduce the income tax rate over time with surplus revenues. King said: “We were afraid to do it because we were afraid it would create deficits down the road. It turns out we had four to five years of surpluses and we could have done it.”

L.D. 849 operates in concert with a spending cap that was signed into law by then-Gov. John Baldacci in 2005. It was done, in part, to address a $1 billion deficit that he inherited from the King administration. When prosperous times return, it takes monies above the statutory spending limitation, and returns them to taxpayers through gradual income tax rate reductions.

Rather than use excess revenues to create new programs, it will return them to taxpayers. A 4 percent income tax target will encourage people to reside in Maine year-round. It will support a more vibrant economy when better times return.

– Sen. Jon Courtney, R-Sanford, is the majority leader of the Maine Senate.

 

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