Explanation:

This week, local legislators comment on the session-ending tax reform bill, LD 1925, which failed to pass. The bill promised to lower income taxes by broadening the sales tax.

Answers:

Sen. Bill Diamond: No

I opposed this bill because it would have caused more harm than good to individual taxpayers, small businesses and our tourism industry.

This bill would have added a new sales tax on more than 70 different services, recreation and amusements and more. Supporters of the bill highlighted the fact that the income tax would be lowered to offset other tax increases. Unfortunately, the bill was an attempt at tax reform rather than tax relief which is what is needed.

Worst of all, this bill was presented to the legislature in the final few days of the session without having a public hearing. As I said during debate in the Senate, this bill was missing a key ingredient, that being lengthy public review. Public hearings are a critical part of the legislative process and shouldn’t be avoided.

Tax reform may be needed at some point, but tax relief should be our immediate goal. Tax relief doesn’t mean lowering taxes in one area and raising taxes in another, instead it should mean finding savings in the budget and using that money to lower taxes – period. This bill was misdirected and the only “relief” was that it didn’t pass.

Rep. John Robinson: No

Tax reform was one of the crucial policy matters under scrutiny during the final days of the session.

L.D. 1925’s title portrayed the cut taxes for Maine residents of $140 million. However, in reality, it was a massive broadening of the sales tax, which had it passed, would have resulted in a colossal tax shift.

This broadening was of grave concern to me, especially with the past propensity of the majority in the Maine Legislature to increase spending above and beyond tax collections. Maine has made an old habit of spending more than it takes in and passing the bill onto the public in the form of new taxes. Broadening the tax base is nothing more then a tax shift.

Without ironclad Constitutional imposed growth limits on government spending, what guarantee does the public have that new taxes created by broadening the base simply won’t be used to fund growing programs or new expansions of government?

Meaningful tax relief will come in the form of spending reductions, not in expanding the tax code. Expansive rewriting of the tax code that “broadens the tax base,” is not the answer. It is time to shrink Government not broaden its taxation powers.

Rep. Gary Plummer: No

I voted no on this tax shift. I do not consider this proposal real tax relief. I had hoped for much more than this bill offered, but by the time we were done with the state budget bill, it became obvious that this Legislature would not be able to control spending and therefore the people of Maine would not get tax relief. I believe that in order to accomplish tax relief we need to spend less rather than to just try to shift the burden to someone else. I do understand that part of the proposal was to export some taxes to people from out of state, but I believe the plan would have also hurt many people, including our elderly population and Maine businesses.

I did receive many contacts about this proposal and I don’t remember that any were in favor. I think that the views of the people are very important and I believe that I am in Augusta to represent the views of constituents. I am convinced that people want tax relief, not tax shifting.

Rep. Rich Cebra: No

LD 1925 was a shift of the tax burden from some taxpayers to others picking winners and losers. If done properly, tax relief would make all taxpayers winners.

The plan had no mechanism to control spending, the one thing that is essential to real relief.

The package would have established a flat 6 percent individual income tax, but eliminate all itemized deductions (anyone who deducts their mortgage interest would lose that deduction) as well as other exemptions. In their place, the proposal created a variety of complicated credits designed to partially compensate for the lost deductions and credits.

The legislation also proposed to increase the current homestead exemption, however the state only would have covered part of the exemption. The towns would have had to make up the difference by raising property taxes on businesses. This shift would increase the cost of doing business in Maine and force businesses to pass their cost increases onto their customers.

The plan would have required all corporations, regardless of their size, to pay corporate income taxes at the highest marginal rate – 8.93 percent, another heavy burden placed on small local businesses.

The sales tax expansion would have covered hundreds of services that are not currently taxed. Had it passed, virtually every time you reached into your wallet you would have been paying more taxes.

Rep. Mark Bryant: Yes

I voted in favor of the Tax Fairness plan in order to modernize our tax base and put more money back in the pocketbooks of working people. Like many Maine families, I know what it’s like to live paycheck to paycheck, and have those wages cut back further by our existing outdated income tax rate. It doesn’t give many people the opportunity to get ahead, but this plan was estimated to give the average Mainer $400 a year back in their paycheck.

Broadening the sales tax brings balance to a very volatile tax base that relies on only a few major items, and suffers dramatically when sales on those items dip. Expanding the tax base would not only create a more stable revenue stream for the state, it would also allow Maine to export those taxes to people from out of state, saving Maine taxpayers $142 million each year. It would lower Maine’s income tax burden from the seventh highest to the 34th lowest in the nation, and serve as a major incentive for economic growth by taking major steps to reducing our overall tax burden over time.

Carving out a path to prosperity takes bold initiatives like this plan, and a willingness to modernize our approach to taxes. It starts with being able to see more money back in our paychecks, and replacing an outdated system that penalizes hard-working families.

Rep. Gary Moore: No

Tax reform in Augusta was another disappointing fiasco. In fact, the “reform” package was a transparent act of political gimmick-creation that was recognized by anyone paying attention for what it was.

Lower income taxes a little bit for some people- raise and expand sales taxes for everyone! Now there is a great idea.

The Speaker of the House had a “computer model” set up in the State House. Plug in your income and tax info and “voila!” “You will save this much on your income taxes if you vote for this one.

Plugging in the info, I was thrilled to learn that Rita and I would save grand sum of $250.

However, asking for increased sales taxes we would be making if the bill passed got only blank stares and “We haven’t got that in the model.”

My efforts went into suggesting ways to cut the cost of state government. For example, I submitted legislation to combine all of the bureaucratic functions of the Lottery Commission, the Gambling Control Board, the Liquor Commission and the Harness Racing Commission. Money is saved. Taxes go down. The best I could do was get this idea on the agenda for next session.

Standish people made their voices heard loudly and clearly. No one was even remotely fooled by the tax shift nonsense that ruled the day.