Tax debate comes to small communities

Bernie Littlefield (center) talks about the rules of the debate between Rep. Mike Thibodeau (left) and and Rep. John Peotti at the Grant Civic Center in Winterport Wednesday.  They debated about the tax question that will appear on the ballot on June 8. BANGOR DAILY NEWS PHOTO BY GABOR DEGRE
Bernie Littlefield (center) talks about the rules of the debate between Rep. Mike Thibodeau (left) and and Rep. John Peotti at the Grant Civic Center in Winterport Wednesday. They debated about the tax question that will appear on the ballot on June 8. BANGOR DAILY NEWS PHOTO BY GABOR DEGRE
Posted May 12, 2010, at 9:46 p.m.

WINTERPORT, Maine — The debate over Question 1 on the June ballot, which asks Mainers whether they want to reject a new tax reform bill that lowers income taxes and expands some sales taxes, is heating up in communities across the state.

The latest discussion, which was held Wednesday in Winterport and was sponsored by the Winterport Area Business Association, was decidedly one-sided based on audience participation. Nearly all of the 35 people in attendance seemed to favor a repeal of Question 1, despite an even-keeled educated appeal by Rep. John Piotti, D-Unity — one of the main authors of the tax reform plan.

“This is a very important and complicated issue and the sound bites out there don’t help,” said Piotti, who debated Rep. Michael Thibodeau, R-Winterport, who incidentally is running against Piotti for a Senate seat in the fall. “It amazes me how politicized this has become.”

Thibodeau, who admitted before the debate started that he wasn’t a spokesman for Yes on 1, did little to move the debate beyond politics, although he was aided by a crowd that agreed with him. Thibodeau focused his points not on the numbers outlined in the bill but on arguments that his audience could easily relate to.

“Most Mainers believe in fairness,” he said. “How can someone who goes skiing pay lower taxes but I have to pay more to go to the movies with my family? That’s not fair or good tax policy.”

Question 1 states, “Do you want to reject the new law that lowers Maine’s incomes tax and replaces that revenue by making changes to the sales tax?” The law, LD 1495, was passed last year and cuts the top income tax bracket from 8.5 percent to 6.5 percent. To make up for the lost income tax revenue, the bill broadens sales taxes to more categories of goods and services and raises the meals and lodging tax from 7 percent to 8.5 percent.

Piotti, who did his best to inform the crowd of the bill’s benefits, said the changes would spur economic development, stabilize state revenue and reduce the overall tax burden on 90 percent of Mainers by exporting millions in sales taxes.

Thibodeau, by comparison, wanted to know how all of these new state revenue agents, such as auto repair shops and dry cleaners, were going to deal with the new burden of assessing sales taxes. He also said the sales tax revenue, even if tourists pay some, simply funds bureaucracy in Augusta. Piotti reminded the audience that the state cut $800 million in spending during the current budget, a point that didn’t seem to resonate with anyone present.

“We’re in a recession, so there is no revenue,” he said. “We’ve cut, but there’s no payback. This [bill] would change that.”

A majority of the questions from the audience were directed at Piotti, who some claimed was overcomplicating the issue.

“We worked incredibly earnestly on this,” he said. “We tried to do it right. Most economists believe it’s good for Maine.”

The Winterport debate came on the same day the Maine State Chamber of Commerce announced its support for tax reform.

On the other side, the conservative Maine Heritage Policy Center plans to release a report today that calls for a repeal of LD 1495 because it will negatively affect the economy and because it’s unconstitutional.

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