August 18, 2012

Another View: LePage tax cuts progressive, benefit middle class the most

A Democratic representative's criticism reflects a partisan agenda, not reality.

By REP. GARY KNIGHT

I was surprised to read the letter by Rep. Seth Berry in your Aug. 11 issue. I was also taken aback by the headline -- "Gov. LePage and his allies have rewarded the wealthy and punished the middle class." You know it's election season when you see such a misleading title.

Rep. Berry was defending Democrats' TV ads that attacked the tax cut package enacted in the state's biennial budget. He and most of his party supported the budget and, by extension, the tax cuts. It's not often you see a legislator blast away at something he voted for.

I serve with Rep. Berry on the Taxation Committee, where I am the House chair. He knows very well that the tax reductions were skewed, in percentage terms, to favor the lower- and middle-income groups. That's why Maine Revenue Services -- an objective referee -- describes the tax reform package as "progressive."

Some 70,000 low-income taxpayers will pay no income taxes starting in 2013, thanks to the new zero percent tax bracket. Rep. Berry says the new system "offers many working families a few dollars in income tax cuts." According to MRS, about 460,000 households will see an average tax decrease of $337 in 2013. That's "a few dollars"?

Higher-income Mainers receive larger reductions, but they pay most of the taxes. According to MRS, the top 10 percent will get an average tax cut of $994 next year, but they will pay 57 percent of income taxes collected.

The 80 percent of taxpayers in the low- and moderate-income groups pay only 24 percent of the total but will receive 33 percent of the cuts. Middle-class Maine families can expect a tax cut of about 15 percent, while families in the top 10 percent will see estimated reductions of 8.4 percent.

Taken across the board, the lower tax rates are a good deal for Maine citizens.

Rep. Gary Knight, R-Livermore Falls, is co-chairman of the Legislature's Taxation Committee.

 

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