Sen. David Trahan’s recent guest column (Aug. 23) prompted me to write a response.
I am proud of the Legislature’s work on tax reform. Maine’s current tax structure is broken. Our income tax rate is too high too, and the sales tax is too reliant on big ticket items like construction and cars that vary with the economy. When the economy dips, Maine’s revenues fall even faster. The Taxation Committee, the governor’s office and leadership in both chambers worked hard to craft a bill that would lower the overall tax burden for most Maine citizens while making the state’s revenue more stable. As a member of the budget-writing Appropriations Committee, I can confirm that never before has this been so important.
The tax reform bill benefits both individual Mainers and the overall Maine economy. The tax reform bill lowers the income tax for over 95 percent of Maine residents and lowers our top tax rate from the sixth highest in the nation to close to the national average. This will make it easier for small businesses to prosper and grow, and will encourage new businesses to move here. The sales tax changes make revenue more stable and predictable, which will allow for better budget planning. They also make visitors to our state pay a higher share of our taxes, which will lower what Maine residents pay. The new law includes tax credits that will protect low-income Mainers, including the elderly, from the impact of the new services that will now require a sales tax.
I take particular exception to Sen. Trahan’s comments about the effects of tax reform on the elderly. He made much of the fact that many older Mainers don’t file state income tax forms. The reason they don’t is because there is no reason now for them to do so. I firmly believe that filing will increase once there is a refundable credit available for those who don’t pay income taxes. This new refundable credit will be more than enough reason to file a tax return. There is also a special elderly tax credit that will reduce the taxes individuals pay now. In addition, the new law will increase property tax relief efforts by including the Circuit Breaker on the income tax form. And lastly, the new law repeals the tax on meals served in retirement communities.
If the Republicans are successful in their efforts at repeal tax reform, Maine will miss out on the best opportunity we’ve had to make positive changes to our tax code in years. Let’s not stay with a broken system when we some real solutions ready to put in place.
Sen. Margaret Craven, Lewiston
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