May 5, 2013

Our View: 'Gang of 11' tax plan shows how unity can pay big dividends

The nonpartisan proposal could stabilize our state's economy and spread out the tax burden.

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R.J. Harper, right, an IRS-certified volunteer tax preparer, helps last-minute filer Ana Dana at Portland’s Forest Avenue post office on April 17, 2012. A proposal to reform Maine’s tax system is a long shot, given its timing, but it demands serious consideration from legislators and Gov. LePage.

2012 File Photo/John Patriquin

We are overly reliant on the property tax, which does not take into account an owner's ability to pay. There are too many exemptions to the sales tax, meaning that the state's collections rise and fall on the fortunes of just a few products, especially new cars and building supplies.

And with its 7.95 percent top personal income tax bracket, Maine ranks eighth in the nation for highest tax rate, which many argue discourages economic growth.

LEPAGE PLAN SPURS SEARCH FOR OPTIONS

This year, Gov. LePage has proposed a budget that not even he could love. It pays for a cut in the income and estate taxes approved by the last Legislature with cuts to municipal revenue sharing, General Assistance and two property tax relief programs, and it fails to invest more in schools.

Altogether, those changes would create budget crises in almost every city, town and school district in the state, resulting in disastrous cuts to education and public safety or property tax hikes. In most cases, it probably means both.

The only good thing you could say about Gov. LePage's proposed budget is that it creates an opportunity to think about major reform. His budget is crying out for a creative alternative.

The best thing about the Gang of 11 effort is that it shows that politicians can put aside angling for political advantage and tackle big issues that affect a lot of people. This is the kind of cooperation that appears to be impossible in Washington, and we should encourage it when we see it in Maine.

The bill's sponsors say they have consulted Gov. LePage and that he has promised to keep an open mind on the issue of tax reform. We agree with the governor -- and it's not every day we can say that.

Everyone should keep an open mind and consider the broad benefits that a plan like this could deliver before picking apart the details. Budget crises should not be business as usual.

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