May 22, 2018
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Mainers deserve straight talk about tax cuts

By Rep. Susan Morissette and Sen. Tom Martin, Special to the BDN

In a perfect world, political debate would take place on the high plane of honesty and fair play. Citizens could judge the facts and draw their own conclusions. Unfortunately, this is not a perfect world, as we were reminded by a column from Rep. Seth Berry that ran in the Bangor Daily News on Aug. 16. The article contains wild exaggerations and blatant fabrications, as typified by the headline: “Largest tax shift in Maine history hurts working families.”

The subject is the $150 million tax reduction package passed by the Legislature last year as part of the budget. The bill won strong support from Democrats, including Berry, and passed the House 123-19. The changes to the tax system finally provide real relief to our heavily taxed residents. Everyone’s income taxes go down starting next year, including “working families,” and certainly no one gets “hurt.”

As a matter of fact, the Maine Today newspapers, including the Kennebec Journal and the Morning Sentinel, examined the tax package and declared that when the tax cuts are fully enacted, the top 10 percent of taxpayers will “shoulder a higher percentage of the state’s income tax burden; the rest will shoulder less.” They stressed this fact by stating, “Maine’s income tax is more progressive because of the changes.”

But facts evidently don’t matter to Berry. He and his fellow Democrats had already settled on their campaign motto — that Republicans had given a “huge tax cut to the rich.” They have leveled that charge in OpEd columns, radio shows and even political ads on TV.

With the tax cuts objectively judged by major newspapers as weighted in favor of the poor and middle class, Berry switched to a slightly different claim, writing, “Due to many tax measures passed by the majority, the few making $350,000 will receive an income tax cut of $3,000. In future years, this windfall will increase to more than $21,000 per year.”

What he did with this sleight-of-hand maneuver was combine two new laws — the budget and LD 849. As a member of the Taxation Committee, he knows better. His intent is to confuse readers.

The income tax cuts take effect in 2013, and nearly all Maine households will see higher take-home pay. In contrast, LD 849 is unlikely to affect anyone for a decade or more.

LD 849 is a “trigger” bill. It alters the way surplus state revenue is dispersed. After all state obligations are met, surplus revenue is filtered through a series of funds called the “cascade.” The last “catch bucket” in the cascade is the “income tax relief fund.” Under this new law, surplus funds would gradually lower the state’s income tax rates.

According to Maine Revenue Services, in order to give “the rich” the $21,000 tax cut Berry claims, state government would have to experience a surplus of $3 billion. Considering the entire state budget is $3 billion, this claim is ludicrous.

Berry continues his distortions, claiming that cuts to towns and property tax programs will cost “homeowners and renters more than $400 apiece.” This is another whopper.

The $400 figure apparently alludes to the property tax relief program — the so-called “circuit breaker” — where the maximum refund was reduced from $2,000 to $1,600 under the previous administration. Even if the $2,000 was still in place, the average refund last year was $494 under the general program and $368 under the program for seniors. Only about 3 percent of applicants received the maximum amount.

Any cuts to towns have nothing to do with his fictional $400 number. Municipal revenue sharing, in fact, actually went up. The big cuts occurred in fiscal years 2008, 2009 and 2010. Revenue sharing during those years fell steadily from $133 million in 2008 to $97 million in 2010. It bottomed out at $93 million in 2011, the last budget year of the Baldacci administration.

In 2012, by contrast, revenue sharing increased to $96.9 million, while in 2014 it is scheduled to reach $141 million. Republicans stopped the bleeding and, for the first time since 2008, increased money going to towns. The budget also appropriated an additional $63 million for public schools, which directly alleviated property tax pressure.

Ideological differences between parties are a normal part of politics. As long as all sides debate the issues honestly, the process works. Misleading the public to score cheap election-year points damages our democratic system and denies the public the truth.

State Rep. Susan Morissette, R-Winslow, serves on the Insurance and Financial Services Committee and the Criminal Justice and Public Safety Committee. State Sen. Tom Martin, R-Kennebec, chairs the Inland Fisheries and Wildlife Committee and serves on the Labor, Commerce, Research and Economic Development Committee.

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