I think the bipartisan group’s plan is a great place to start. However, I’d suggest four changes:
- Not tax those goods truly essential to life: (a) heating fuel; (b) basic foods, including meats, vegetables, fruits, non-dessert dairy products and grains, including non-dessert baked goods and grain products; and (c) medical/dental care, including prescription medicines, annual physicals, dental cleanings twice a year and non-optional doctor/dentist and hospital visits.
- Keep most of the income-tax changes suggested in the plan but have a two-tiered income-tax system, with those whose household income is $250,000 or greater paying 6 percent and those whose household income is below $250,000 paying the 4 percent suggested. This still lowers the tax rate for all and would help cover the revenue lost by not taxing essential goods.
- Keep, or even return to pre-2011 levels, the estate tax, perhaps exempting only the assessed value of a family business.
- Lower corporate tax rates only for those corporations headquartered in Maine.
Pamela B. Blake
My principal response to the debate in the May 12 Maine Sunday Telegram (“Two sides of reforming Maine taxes”) was disappointment.
I was hoping to see a presentation of substantive data supporting the opposing views. What we got instead was a bunch of “spin,” feel-good selling points with little monetary backup.
Albert DiMillo’s Con presentation was a tad better than the Pro presentation, but neither side gave the kind of in-depth data needed to allow an intelligent understanding of the issues.
Or maybe that’s what they want?
I have read articles and letters and opinions on the proposed tax overhaul designed by the Gang of 11. I do not pretend to be able to discuss most of the proposals.
I am retired, my income is fixed. I do not file income taxes. But I do pay excise taxes, licensing fees, tolls, gasoline tax and, of course, sales tax.
I meet often with others like myself who live on fixed incomes. Our options are limited.
When I was working, coffee break talk would often be centered on new stores, great sales and good restaurants. Now the conversations are about Senior Day at Goodwill and new secondhand shops. New clothes are rare.
An estimated 200,000 Mainers don’t have access to adequate food. What does that say to us? Many seniors are in that group, and many more are close to the line. A sales tax on food will push more people into that group.
I have heard the argument that there will be a potential rebate if you file taxes at the end of the year. Really? Do you honestly think that is going to help?
Most of us who live from paycheck to paycheck are running low by the third week of the month. A few dollars in sales tax paid on food will make a difference as the month goes on.
I cannot see how this can be of benefit to the state. It will just force seniors and others to cut back or force more people over the state line into New Hampshire or to Massachusetts. Neither charge sales tax on food or clothing.
I agree much needs to be done to fix our budget needs. A fair tax system just doesn’t attack those least able to pay.
And let’s not even talk about a sales tax on heating oil!
When members of the Legislature talk of tax reform, it usually means a redistribution for higher and new taxes. For example, Social Security benefits now exempt, will be taxed under a recent tax reform plan being presented in Augusta.
Because our state is no longer receiving the expected revenue from current income taxes, due to job losses, there is a bipartisan proposal to increase and broaden the sales tax that will affect everyone.
However, be careful what you wish for, since Maine taxpayers will then have to pay new taxes on home heating oil, home repairs, haircuts, electricity and many other services not currently taxed.
The proponents are stating that such a tax reform plan will also reduce property taxes up to $1,000 for homeowners with a $50,000 homestead exemption, but they fail to recognize that cities and towns will then simply increase their mill rates to make up for any loss of revenue.
In conclusion, this tax reform plan is not “bold,” and if it reaches the Legislature for a vote, it should be dead on arrival as a bad idea for Maine people.
Welcome to “tax trap” season in Maine. People are surely now confused with opinions expressed by our two-party Legislature. I think that to do nothing would be the worst result in all of these deliberations.
My wife and I live on small fixed incomes, we do not invest, our once-fruitful CD accounts no longer yield much, and our home has dropped in value from five years ago, yet our property taxes have increased.
School districts, which may account for up to 60 percent of one’s property tax bill, need to seriously be removed from being little kingdoms to living within reasonable budgets.
State income tax reductions at the cost of raising sales taxes seems like a good solution. We have computers doing everything today. Why not issue plastic that allows for a graduated sales tax based on one’s state income tax return? For example, anyone earning under $50,000 pays 5 percent sales tax; $50,000 to $100,000, 5.5 percent, etc.
Higher sales taxes for accommodations and restaurant meals is the way to go. Snowbirds wintering in the Southeast and summer tourists there find higher taxes on services they use than is charged in Maine.
Hotels and restaurants here need not fear higher taxes on their services. Their clients will not go elsewhere because most other places already have taxes higher than Maine’s.
I would never suggest making home heating oil subject to Maine sales taxes. Other things on the list would be OK.
Peter J. Lucas
I’m concerned about the tax bill being debated here in Maine.
At Hampden Academy, Stephen King (the other one) taught me that there are two types of taxes, with opposite effects on rich and poor.
Income and property taxes are just that: The more you make/own, the more you pay. Sales tax is just the opposite: The poor have a harder time paying the extra nickel/dollar than the rich.
It seems to me that an increase in sales tax to 6 percent with an offset in lower income and property tax would be devastating to those just getting by.
Further, it is estimated that this will increase revenue, and that the increase will be shouldered by the tourists. What about those of us who would end up paying sales tax on groceries and heating oil year round?
Furthermore, does the state control property taxes, or is that by town or county? What will keep income and property taxes from being raised in the not-so-distant future?
I don’t see how this will help the average Mainer. Not the smartest move out of Augusta.
Wayne C. Miller
A group of 11 legislators made up of five Republicans, five Democrats and one independent recently unveiled a truly comprehensive tax reform that would benefit all Mainers. All, not just a few.
Of course, the leadership of the Democrats and the leadership of the Republicans don’t like it. They are suffering from the “not invented here” mentality.
To be fair, each legislator can probably find one of her pet oxen getting gored by the proposal. I have one: the estate tax. Under the “Gang of 11″ proposal, it’s gone.
But you know what? In return for the immense advantages of the proposal, I’ll forget I ever heard about a state estate tax. What’s not to like here? It cuts the income tax to 4 percent. It reduces property taxes.
“Wait!” the liberals cry. “It taxes groceries!” That means when Martha Stewart buys 20 cases of shrimp for a party, she’ll have to pay a sales tax! Meanwhile, the less well-off among us will get a sales tax credit to more than refund the extra sales tax they pay.
Finally, the proposal is budget-neutral. It raises about $700 million more revenue. It shifts the burden of paying taxes more to the sales tax, which means that our visitors pay more, and we who live here will pay less. What’s not to like?
Now, the final boost: Grover Norquist doesn’t like it! What better endorsement can one ask?
Please, rank-and-file Republicans and Democrats, pass this bill.
Chalmers “Chop” Hardenbergh