GOP response to the governor’s weekly radio address for the weekend of Sept 5-6, 2009
GOP response to the governor’s weekly radio address for the weekend of Sept 5-6, 2009
Greetings, this is Kathy Chase, state representative from Wells.
We’re coming down to the wire in the campaign to get rid of the tax overhaul law passed by the Legislature in June. If the group called Still Fed Up With Taxes can turn in 55,000 valid signatures next week, the law will be blocked from taking effect in January and voters will have the final say next summer in a people’s veto referendum. Hundreds of bipartisan volunteers have collected signatures around the state.
As the deadline approaches, the Democrats who passed this law are harassing people trying to sign the petitions. It’s a sorry spectacle when Democrats are reduced to hassling Mainers’ who are simply exercising their constitutional rights. But that’s to be expected when the majority party tries to pull a fast one and the people decide they’re not going to take it.
This all could have been avoided. Back when the tax bill came before the Legislature, an amendment was submitted by Representative Josh Tardy to send the bill to the voters in November. He wanted a robust, statewide discussion and then a final decision by the people. But in a move all too common in the State House, the majority party squashed that amendment like a bug. Their attitude toward the people was, just keep quiet and pay your taxes; we know best.
Now, thanks to the people’s veto effort, we understand much more about this law. You may know the broad outlines – it expands the sales tax to about 100 services and activities affecting thousands of small businesses. It taxes the labor on car repairs, including oil changes and tire rotation. It taxes movie tickets and concerts. It taxes house cleaning, car washes, boat moorings and excursions by almost any means imaginable, even a blimp. It taxes clowns, jugglers and ventriloquists you might hire for a party. It throws a sales tax net over the whole state. It also jacks up the meals and lodging tax from 7 percent to 8.5 percent. The list of taxable services is so complex and murky that Maine Revenue Services is still trying to decide if babysitting is included.
In return, the law lowers the top income tax rate from 8.5 percent to 6.5 percent. That sounds fine until you realize that at least 75 percent of Maine taxpayers already pay an effective rate of less than 4 percent. The current tax system has progressive rates starting at 2 percent and personal exemptions that reduce the amount of income subject to taxation. The law would replace the lower rates and install a 6.5 percent flat tax. Currently, we also can use itemized deductions to lower our taxable income, such as mortgage interest, property taxes, medical expenses and charitable contributions. The law eliminates all those deductions. It replaces them with something called a household credit, but that starts phasing out early.
Maine Revenue Services admits that at least 86,000 working families will pay more taxes than they pay now – about $430 more. The people who make out the best are the several thousand taxpayers earning more than $330,000. They receive most of the $54 million in overall tax cuts. Mainers with average incomes can expect a $39 tax decrease, but even that tiny amount will be wiped out over the next few years. The law suspends until 2014 the indexing of taxes to compensate for inflation. By 2013, most Mainers will see their taxes rise by up to $150.
The elderly will take the most brutal hit. According to Maine Revenue Services, about 300,000 Maine residents don’t earn enough money to file an income tax return. The elderly on fixed incomes, like Social Security, make up most of this group. Expanding sales taxes to appliance repair, lawn and garden equipment repair, meals and lodging and all the rest will impact them heavily. The new law has a $50 credit for people in this group, but to get it, they have to file a tax return. Maine Revenue estimates that, at best, only 50 percent will apply. The authors of the bill built that consideration into their projections. That means that the Democrats who pushed this bill knew that at least 150,000 elderly residents on fixed incomes would see a significant sales tax increase with no income tax relief.
This law is a bad deal for Maine. To learn more, go to the web site www.stillfedupwithtaxes.net.
This is Kathy Chase. Thank you for listening.
Greetings, this is Kathy Chase, state representative from Wells.
We’re coming down to the wire in the campaign to get rid of the tax overhaul law passed by the Legislature in June. If the group called Still Fed Up With Taxes can turn in 55,000 valid signatures next week, the law will be blocked from taking effect in January and voters will have the final say next summer in a people’s veto referendum. Hundreds of bipartisan volunteers have collected signatures around the state.
As the deadline approaches, the Democrats who passed this law are harassing people trying to sign the petitions. It’s a sorry spectacle when Democrats are reduced to hassling Mainers’ who are simply exercising their constitutional rights. But that’s to be expected when the majority party tries to pull a fast one and the people decide they’re not going to take it.
This all could have been avoided. Back when the tax bill came before the Legislature, an amendment was submitted by Representative Josh Tardy to send the bill to the voters in November. He wanted a robust, statewide discussion and then a final decision by the people. But in a move all too common in the State House, the majority party squashed that amendment like a bug. Their attitude toward the people was, just keep quiet and pay your taxes; we know best.
Now, thanks to the people’s veto effort, we understand much more about this law. You may know the broad outlines – it expands the sales tax to about 100 services and activities affecting thousands of small businesses. It taxes the labor on car repairs, including oil changes and tire rotation. It taxes movie tickets and concerts. It taxes house cleaning, car washes, boat moorings and excursions by almost any means imaginable, even a blimp. It taxes clowns, jugglers and ventriloquists you might hire for a party. It throws a sales tax net over the whole state. It also jacks up the meals and lodging tax from 7 percent to 8.5 percent. The list of taxable services is so complex and murky that Maine Revenue Services is still trying to decide if babysitting is included.
In return, the law lowers the top income tax rate from 8.5 percent to 6.5 percent. That sounds fine until you realize that at least 75 percent of Maine taxpayers already pay an effective rate of less than 4 percent. The current tax system has progressive rates starting at 2 percent and personal exemptions that reduce the amount of income subject to taxation. The law would replace the lower rates and install a 6.5 percent flat tax. Currently, we also can use itemized deductions to lower our taxable income, such as mortgage interest, property taxes, medical expenses and charitable contributions. The law eliminates all those deductions. It replaces them with something called a household credit, but that starts phasing out early.
Maine Revenue Services admits that at least 86,000 working families will pay more taxes than they pay now – about $430 more. The people who make out the best are the several thousand taxpayers earning more than $330,000. They receive most of the $54 million in overall tax cuts. Mainers with average incomes can expect a $39 tax decrease, but even that tiny amount will be wiped out over the next few years. The law suspends until 2014 the indexing of taxes to compensate for inflation. By 2013, most Mainers will see their taxes rise by up to $150.
The elderly will take the most brutal hit. According to Maine Revenue Services, about 300,000 Maine residents don’t earn enough money to file an income tax return. The elderly on fixed incomes, like Social Security, make up most of this group. Expanding sales taxes to appliance repair, lawn and garden equipment repair, meals and lodging and all the rest will impact them heavily. The new law has a $50 credit for people in this group, but to get it, they have to file a tax return. Maine Revenue estimates that, at best, only 50 percent will apply. The authors of the bill built that consideration into their projections. That means that the Democrats who pushed this bill knew that at least 150,000 elderly residents on fixed incomes would see a significant sales tax increase with no income tax relief.
This law is a bad deal for Maine. To learn more, go to the web site www.stillfedupwithtaxes.net.
This is Kathy Chase. Thank you for listening.
posted by Kathleen Chase at
10:37 AM
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