Editorial,Opinion, Wiscasset Newspaper, July 30, 2009

The Tax ‘Reform’ Bill

By State Rep. Jonathan McKane

There is a tornado of spin in the Maine media these days concerning "tax reform."

We’ve seen this kind of hard-core propaganda before in this state. Grand promises are dependent upon leaps of faith and backed up by "trust me" when questioned by a skeptical public.

• 2003: "Dirigo Health is going to lower the cost of health insurance for all Mainers and will insure the 131,000 uninsured in five years."

• 2005: "LD1 is going to give us bold and historic property tax relief."

• 2007: "School consolidation will lower the cost of education statewide and bring us tax relief."

These initiatives have several things in common. First, they did little more than exacerbate the problems they were attempting to address. But also, they are all extremely complicated and confusing, making it difficult to track progress and results. Again, all we heard was "trust us, we are having great success."

Now it is 2009, and we have another major policy initiative in Maine – tax reform. Predictably, the promises are audacious and many. And again, as expected, the new law is an elaborate jigsaw puzzle of rules and legalese that few can fully comprehend.

We have been promised, "This tax-reform plan will bring tax relief to all Maine citizens and improve Maine's business climate."

Sadly, this new law is not about tax relief. It is about bringing more and steadier revenues to Augusta. Steadier revenues mean that in both good times and bad, money will continue to flow into state coffers. As the system exists today, when times are bad, fewer taxes are collected – as it should be.

That is why the state is going to tax car repairs. When times are tough, Maine people buy fewer cars and thus there is less tax money from these sales. In order to keep the money flowing freely to Augusta in these tough times, repairs on our older vehicles will be taxed.

We are told that there will be more than $53 million in tax relief because that is the supposed amount of taxes that will be "exported." Exporting taxes means getting non-residents to pay them, hence, many activities related to tourism will now be taxed or taxes increased, such as our already-high meals tax. The problem is, Maine people enjoy those activities, too.

There is no sure way to determine the exact amount Maine government will receive with these new and increased sales taxes. That $53 million is just a wild guess.

What is a sure thing, however, is that many small Maine businesses will become tax collectors for the state – especially those businesses involved in tourism or "entertainment."

These businesses will need to keep an accurate accounting of all sales subject to the tax, charge the tax, pay the state on either a monthly or quarterly basis and submit reports accompanying the payments – or face a stiff penalty.

The most deceptive part of this new tax plan, however, is the changes to the income tax laws. On the surface the drop of Maine’s highest rate from 8.5% too 6.5% looks great. But it’s not that simple. This new law removes Maine’s current itemized deduction system and replaces it with "credits."

The limiting of itemized deductions is the main reason that tens of thousands of taxpayers will be paying more in taxes.

This tax increase actually pays for significant income tax cuts for a small group – less than 5,000 taxpayers – with incomes over $300,000. That’s right – the highest-level income earners in the state are getting large tax cuts at the expense of the middle class.

But there’s more. Income tax indexing is being removed for several years, meaning income tax rates will stay higher than they should as inflation advances.

Also, keep in mind, no one's total income tax rate is going down by 2 percentage points. With current law, most Mainers – after itemized deductions – pay between 3 and 4 percent. At best, some lucky Mainers might see – if anything – a 0.5 percent to 1.5 percent decrease in the income tax they pay.

But don't forget – everyone will be paying the new and higher sales taxes. The best-case scenarios predict that at least 86,000 families will be paying more in taxes. Some Mainers will break even. But a few lucky – and very wealthy – Mainers will hit the jackpot.

All told, these changes in our income tax laws put Maine in a class by ourselves – completely out-of-whack with federal law – even more than we were.

There are many questions about the true outcome of this new tax expansion scheme. The Maine Legislature didn’t have a clue about the consequences of this bill when we voted on it in June.

We were told then, as you are being told now, "trust us." That’s not a good sign.

Jon McKane represents House District 51 - Bristol, Damariscotta, Edgecomb, Newcastle, South Bristol and Monhegan Plantation.

Dump tax proposal

Dear Editor:

In addition to the disastrous school consolidation, state take-over of county jails, LD 1 and Dirigo legislation, now we also have LD 1495. LD 1495 is touted by the state as "tax relief" for Maine families and businesses and that the tourists will bear the brunt of the "exported" taxes. NOT SO!

Some of the items subject to this tax include: exhibition attendance fees, sightseeing excursions, entertainment tickets (such as movies, theatre, amusement parks, arcades), long distance telephone service, services for installation, repair and maintenance (autos, for example), personal property services: dry cleaners, pet-related services, car washing, vehicle towing. The list seems endless.

Many small businesses will now become tax collectors for the state –programming cash registers, charging the tax, keeping track and paying the state using their applicable forms on a monthly or quarterly basis. The new tax on car repairs alone will be particularly burdensome to poorer Mainers as well as to the auto mechanics. The elderly and the poor will be the hardest hit.

Noted anthropologist Margaret Mead once said, "Never doubt that a small group of citizens can change the world." If you are a registered voter in the town of Wiscasset and want to sign a petition for the repeal this outrageous piece of legislation (LD 1495), please contact me at 882-6776 or via e-mail at seafield@roadrunner.com at your earliest convenience.

Thank you.

Sincerely,

Katharine Martin-Savage

Wiscasset

Town clock a non issue

Dear Editor:

This letter is in response to a citizen complaint at a recent selectmen’s meeting.

The town has total access to the clock tower at all times. Access is just a phone call away. Key people know this information.

The public is not allowed in the clock tower because of insurance regulations.

The clock is being serviced in August and the exterior of the tower will be inspected by the town to determine what repairs are needed.

Respectfully,

Joe Cahoon

Property Manager

Injustice to staff

Dear Editor:

The staff of SVRSU [Sheepscot Valley Regional School Unit] was done a great injustice by the editorial in the July 23issue of the Wiscasset Newspaper. To start the editorial out with "In years past, educators turned out overwhelmingly at Wiscasset’s Town Meeting to vote"… was already putting a negative slant on the editorial.

The editorial then stated that taxpayers voted against the budget because they thought it was still too high and educators voted against it because they thought it was too low. There were many voters who are not educators who voted against it as well because they thought too much had been cut especially from the instructional cost center.

Furthermore, the editorial went on to say that educators were determined that this budget would not be cut and stacked the hearing to approve it as presented. It stated that their numbers dominated the hearing and voted heavily in favor of each article as it was presented.

The editorial further states that taxpayers’ voices were insignificant in the face of the over-whelming presence of educators and many taxpayers left early, seeing the writing on the wall.

The writer of the editorial, Alan Bebout, was not even present at the budget hearing, so how did he come to make such statements. Second and third hand information.

I was at the budget hearing. Educators did not stack the meeting. There was a group of educators sitting on the bleachers in the back listening to the proceedings. That is their right but since they live out of district, they could neither speak nor vote. Of course there were educators there who had a right to vote. They live in the district and have the same rights as you or me. But those educators did not dominate the discussion; in fact, I believe there were just two who said anything. When the paper ballots on Article 14 were tallied, there were 125 yes and 38 no.

There is nothing that could have been done about the negative impact of this editorial prior to voting day but in the future, if we are to read and be influenced by editorials, let’s get them right.

Sandra S. Crehore

Westport Island

Editor’s Note: Editorials are opinions. As such, readers are free to agree or disagree. There are no right or wrong ones.

Thanks to all for Shuffle success

Dear Editor:

The Fifth Annual Healthy Kids Strawberry Shortcake Shuffle was a big success this year. About 400 people ran, walked and shuffled over the 5K and Fun Run courses, and every one of them was treated to fresh, local strawberry shortcake after their workout.

The whole event raised money for Healthy Kids, Lincoln County’s child abuse and neglect council, and brought families together in a fun, healthy activity.

We would like to thank our sponsors, who made this event possible: The Contented Sole Restaurant, Creekside Dental, Miles Health Care,
Kieve-Wavus Education, and Reny’s.

Our Strawberry Sponsors support the event as well: Larson’s Lunchbox, Mexicali Blues, Jaret and Cohn Realtors, Lifespan Family Medicine, Full Circle Family Medicine, Second Congregational Church, and St. Andrews Church.

The CLC YMCA generously hosted us again this year and Crockett Septic provided for runners’ pre-race needs. Volunteers too numerous to name showed up to pull this event off, and we could not make the Shuffle happen without them.

Greg Latimer deserves special thanks as our course director, keeping runners and volunteers safe on the roads.

Thanks for a great event!

Sincerely,

Healthy Kids Board of Directors

Enjoying the island preserve

Dear Editor:

The heavy summer rains washed out a section of bog bridge at Bon-yun Preserve and caused some uprooting of trees along the trails. Thanks to help from Archie Bonyun and a crew from the Westport Island Conservation Commission and the Kennebec Estuary Land Trust, the bog bridge has been rebuilt and extended and the trails are now passable and well marked. The Bon-yun Preserve, located on Thomas Point on Westport Island, is a treasure donated by the Bonyun family for our enjoyment of the natural beauty and for the protection of wildlife.

Although our dogs are our best friends, they are the natural enemies of much of the wildlife the preserve is protecting. The Kennebec Estuary Land Trust invites you to please come and marvel at the natural beauty and look for the eagles, osprey and other "residents" of the preserve, but please leave your best friend at home.

To find the Bonyun Preserve, take Rt. 144 south 10 miles from the bridge to the second intersection with West Shore Road. Turn right and go .25 miles to the parking area located on your left.

Dennis Dunbar

Kennebec Estuary Land Trust

Board of Directors

How about a place for skateboarders?

Dear Editor:

I met three very nice young men on Water Street in Wiscasset this week.

All three were on skateboards. They were not bothering anyone. We have no place in Wiscasset for them to skateboard.

It is time to do something for these young men. All sports have a beginning – we need to help.

Could we have volunteers? We have tennis courts, basketball courts, and a swimming pool – come on!

Connie Dalton

Wiscasset