State Sen. John Baldacci said Sunday that he does not favor a service tax for Maine and that professional and business people in the state need not be alarmed that such a tax will be implemented.
Responding to statements made by Senate candidate N. Laurence Willey, the challenger to Baldacci’s seat, in Saturday’s Maine Weekend, the Bangor senator said he started the momentum against new taxes on professional and business services — not Willey.
“My position is not new,” he said. “I would welcome him to join me.”
Baldacci is chairman of the Senate’s Select Committee on Comprehensive Tax Reform which was formed to examine the inequities and inconsistencies of the state’s tax structure. Members were appointed to subcommittees on sales, business, and property taxes, as well as to an advisory group, in July.
Expanding the sales tax to include taxes on services was considered by the subcommittee. Legal and medical taxes could fall prey to such a taxation system, Baldacci said in July.
But that is not likely to happen, he remarked. “The scenario is before us because it has been considered in past reports we’re using for background; so it will be considered.
“But I want to nip in the bud this idea that we’re in favor of service taxes,” Baldacci continued. “I’m not in favor of it.”
In Saturday’s newspaper, Willey challenged Baldacci to retract a statement that he considered a service tax a possibility.
A service tax on doctors, hairdressers, lawyers, and accountants “would discourage business and produce economic hardship for middle- and low-income wage earners and the elderly,” Willey maintained.
“I say there is absolutely no way that such a sales tax on services … will be enacted in this state,” Willey went on. “I am hereby calling upon my opponent to join me in pledging there will be no new service tax …”
While commenting on Willey’s statements, Baldacci said he was not rebutting his opponent, but making his opinions clear and known. “We are looking at reducing taxes to spur development,” Baldacci added.
The select committee will incorporate the findings of the subcommittees and of the consultant to “undertake a study of the current taxation system and tax policies in the state and strive to establish a comprehensive tax-reform package,” according to a draft of the document requesting proposals from the interested consultants.
The goal is to present a package to the Legislature by the end of January.
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