Taxpayers can afford this reform

By David Trahan and Jonathan McKane, Special to the BDN
Posted April 22, 2011, at 8:42 p.m.

It comes as no surprise that the Bangor Daily News questions the Republican tax proposal that is tipped in favor of the taxpayer. It was only last year that the BDN advocated for the Democrats’ tax reform plan that expanded the sales tax to over 100 new items and increased revenues to state government.

Last weekend, in the editorial “Tax Bait and Switch,” the BDN unfairly depicts the Republican tax relief package as irresponsible and asks the question, “Can the state afford the changes?” If you are a taxpayer, the answer is yes.

The Republican plan calls for the elimination of the 2 percent, 4.5 percent and 7 percent tax brackets and lowers the top rate of 8.5 percent to the governor’s recommendation of 7.95 percent. In addition, our plan calls for conforming the personal exemption and standard deduction to the federal standard. These changes would leave two brackets, 6.5 percent and 7.95 percent. A family of four will be able to earn as much as $35,750 a year before paying any state income taxes – up from $21,400 under current law – a 67 percent increase in tax-free income.

With these changes, 70,000 Maine families will no longer have any state income tax obligation.  In 2012, all Maine families will see an average tax cut of $243 dollars. In 2013, the average tax cut will be $343.

And our plan does more:  It makes changes that allow small business to accelerate depreciation on new or used equipment with a value of $500,000 or less.

It establishes a sales tax holiday each year exempting purchases up to $1,500 from the sales tax. We know how the rising cost of food and fuel is consuming paychecks and we want to give all Maine families and retirees a hand up before winter on purchases such as clothing and appliances.

We eliminate the tax now charged on meals in retirement facilities. Maine’s retirees should not have a tax on meals in their home.

We eliminate the sales taxes on fuel for groundfishing boats in the Gulf of Maine. This change means hundreds of thousands of pounds of ground fish will now be landed in Portland instead of Massachusetts, reinvigorating the Portland Fish Exchange.

We eliminate the new requirement by Maine Revenue Services that Maine redemption centers collect sales taxes on containers used to transport bottles and cans. This change will save small businesses and jobs across our state.

We eliminate the Alternative Minimum Tax.

And we double the death tax exemption from $1 million to $2 million and establish a new rate structure. The change is desperately needed to save Maine farms and small businesses.

Maine Republicans understand state workers want to lower taxes, too, and we plan to work with them to build a more efficient state government. Just recently the Maine State Employees Association delivered a report to the governor and the legislature with 3,000 recommendations on ways to save money in state government. They plan to conduct another survey to solicit a new round of ideas.  We will work with them to create a formal process to implement their recommendations within the Legislature’s Office of Program Evaluation and Government Accountability.

This recently released Republican plan fairly distributes $203 million in desperately needed tax relief over two years.

State government always finds enough revenue to fill a budget shortfall. And there always seems to be enough to expand a government program. Yet somehow, when it comes to helping Maine workers, families and businesses keep more of their hard-earned dollars to spend the way they want, there are always excuses why we can’t do it — even after witnessing the wasteful spending scandals such as those at the Maine Turnpike Authority and the Green Energy Alliance.

It’s time to stop the excuses. The BDN and the Maine Democrats need to join us in getting the job done. We have created a fair and reasonable plan.

David Trahan, R-Waldoboro, is Senate chair of the Legislature’s Taxation Committee. Rep. Jonathan McKane, R-Newcastle, represents District 51 in the Maine House of Representatives.

http://bangordailynews.com/2011/04/22/opinion/taxpayers-can-afford-this-reform/ printed on July 30, 2014