Kathleen Chase, Maine State Representative

Monday, November 16, 2009

Republican response to the governor’s weekly address: For the weekend of November14-15, 2009

Republican response to the governor’s weekly address:

For the weekend of November14-15, 2009

Greetings, this is Kathy Chase, state representative from Wells. The taxpayers of Maine got some good news this week. The Secretary of State ruled that petitioners collected enough valid signatures to put the new tax package on the ballot. The law is suspended until next June, when voters will have a chance to repeal it.

Even though this is a fatally flawed law that never should have been passed, it took a small miracle for the petition drive to succeed. A group called Still Fed Up With Taxes was able to gather more than 56,000 valid signatures in a short period of time, during the rainiest summer on record and with a budget of only $60,000. That’s about $200,000 less than the experts said they would need.

Frankly, few people thought it could be done; and we salute the hundreds of grassroots volunteers who gave up summer weekends to stand at shopping centers and county fairs to patiently explain the problems with this law and ask for signatures. The Green Party also should be commended for their petition work. It’s not often that Republicans and Greens join forces, but both parties were disturbed by the law’s savage impact on the poor and the elderly.

The job was made even harder by certain opponents who harassed petitioners and tried to block citizens from signing the form. In one case, an unknown person smashed the window of a car and stole completed petitions with several thousand names. A Republican legislator had his car keyed while he was out gathering signatures. These are Chicago-style political tactics that have no place in Maine.

All this could have been avoided. Last June, when the bill came before the Legislature, Representative Josh Tardy proposed an amendment to send the bill to the voters this fall. He wanted a robust, statewide discussion and then a final decision by the people. After all, this is the biggest change to Maine’s tax system in 40 years; and hundreds of thousands of our citizens will end up paying a lot more in taxes. But as usual, the majority party killed the amendment. Their attitude toward the people was just keep quiet and pay up.

Not a single Republican voted for this bill in the House. The final version was written behind closed doors and dropped on legislators desks just minutes before a vote was called. The Democrats had good reason to sneak this bill through in the final hours of the session. They knew that once people understood the details, they would reject it out of hand.

Basically, this tax shift trims the income tax rate and expands the sales tax to about 100 common services and activities. The labor on car repairs would be taxed. So would movie tickets, sporting events, moving services, boat moorings, car washing, house cleaning, dog grooming and dozens of other everyday items. The law is so bewildering that the Legislature’s Taxation Committee is still meeting with Maine Revenue Services to figure out what is taxed and what isn’t. I serve on that committee; and last week the discussion dealt with those huge, inflatable, bouncy things that parents rent for kids’ birthday parties. If Maine Revenue and the committee that wrote the bill can’t decide what gets taxed, imagine the headaches facing the thousands of small businesses that provide these services. The sales tax on meals and lodging would jump to 8.5 percent. Golf greens fees and ski lift tickets were exempted at the last minute by lobbying from politically connected insiders.

In return for all these new sales taxes, the law lowers the top income tax rate from 8.5 percent to 6.5 percent. That sounds great until you discover that most Maine taxpayers already pay an effective rate of less than 4 percent. The current system has progressive rates starting at 2 percent and personal exemptions that reduce taxable income. Those lower brackets would be eliminated and replaced by a flat rate of 6.5 percent. Traditional deductions totally disappear. You could no longer deduct your mortgage interest or your property taxes. They are replaced by a household credit, which phases out early. Maine Revenue admits that 86,000 tax filers would see an overall tax increase. But the real damage hits the 300,000 Mainers who don’t file tax returns. Their incomes are too low. For them, this is a pure sales tax increase, with no relief anywhere. The Democrats didn’t want you to know these details, which is why they rammed this thing through on the sly. But rest assured that by next June, the voters of Maine will be fully informed about what the majority party tried to do to them.

This is Representative Kathy Chase. Thank you for listening. (And reading)