Wednesday, December 4, 2013
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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.
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