Bush’s economic package good for Maine

George W. Bush recently unveiled a plan aimed at strengthening the economy. The president’s economic agenda will encourage consumer spending, promote investment by individuals and businesses, and deliver critical help to unemployed workers. This plan will boost the economy and lead to job creation. If passed by Congress, it would benefit the state of Maine and all of America.

Maine House Speaker Patrick Colwell and Democratic Leader John Richardson recently said, “The president’s tax plan and economic policies are irresponsible and hurt Maine at a time when the state is in economic dire straits.” Nothing could be further from the truth. It seems to us that the only people who are opposed to tax cuts are politicians. Nearly half a million taxpaying Maine residents, many of whom are already struggling to make ends meet, will benefit from the President’s growth package.

Apparently Reps. Colwell and Richardson have forgotten what got Maine into these “dire straits” to begin with. Maine state government expenditures have been outpacing inflation and personal income growth. These unsustainable levels of spending have helped lead to our high tax burden and poor business climate in Maine, which is at least partially responsible for our $1 billion deficit.

The president’s proposal to speed up the 2001 tax cuts would benefit everybody who pays taxes in Maine – especially middle-income earners. A typical family of four with two earners making a combined $39,000 in income will receive a total of $1,100 in tax relief under the president’s plan. Middle-income families will also receive additional relief from accelerated reduction of the marriage penalty; 169,000 married couples in Maine will benefit from his proposal to increase the standard deduction for joint filers to double the amount for single filers. Furthermore, 93,000 taxpayers in Maine will benefit from the acceleration of the reductions in income tax rates.

Married couples and single parents in Maine will benefit from the acceleration of the increase in the child tax credit from $600 to $1,000. This hastening of the child tax credit was originally scheduled to be phased in between 2005 and 2010. Congress has already passed these reductions, and as the president said in his State of the Union address Tuesday night, “If this tax relief is good for Americans three, or five, or seven years from now, it is even better for Americans today.”

Small businesses are the cornerstone of Maine’s economy, yet they struggle to cope with Maine’s high taxes and to provide health coverage for their employees. Under the president’s plan, 104,000 business taxpayers in Maine would be able to use their tax savings to invest in new equipment, hire additional workers, or increase their pay and benefits.

Maine has experienced more than its share of layoffs in recent months. President Bush has made unemployed workers a priority of his economic agenda by extending their unemployment benefits. Under the new plan, workers who have lost their job, such as those formerly employed by Great Northern Paper in East Millinocket, and qualify for unemployment benefits will get more help, too. Many will qualify for new, more flexible Personal Re-employment Accounts, which encourage workers to find work quickly.

These accounts would provide unemployed workers with up to $3,000 to use for job training, child care, transportation or other expenses associated with finding a new job. A person who gets a job within 13 weeks will be able to keep the leftover funds from their account as a re-employment bonus. This will help them when they are looking for work and give them an incentive to find work faster.

Maine is the highest-taxed state in the nation. Our citizens need more breathing room between “broke” and “just getting by.” Bigger paychecks are one way to accomplish that. Speaker Colwell and Rep. Richardson may view it as “irresponsible,” but from where we stand, tax relief would be a welcome change in the direction of our government’s spending policy. The president’s economic plan is a great start and will help Maine citizens.

Paul Davis, R-Sangerville, is the Maine Senate Republican Leader. Chandler Woodcock, R-Farmington, is the Assistant Republican Leader.