December 24, 2024
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To exempt necessities, start taxing frills

Your home: that’s a necessity. Maine taxes on necessities are high. Body piercing is not a necessity, but this “service” is tax exempt. That’s goofy policy. Your income is a necessity. Tattoos may seem like a necessity when you’ve had a few too many, but, face it, tattoos are not a necessity. Let’s eliminate that inane tax loophole!

Beer and wine: Sins? No way. Taxing these items decreases consumption by youth, but drinking isn’t sinful. A mistake? Sometimes – often leading to other mistakes (tattoos for example), but a sin? Nah.

Taxing someone out of a modest home? That’s a sin! LD 1595, in a majority report from the Tax Committee, addresses that REAL sin by increasing homestead exemption reimbursement, the “Tax & Rent” program, and cutting income taxes.

Soda and snack food: a sin? Heck no. Is overindulgence a mistake? Perhaps, but not a sin.

Imposing an income tax on a working family making $25,000 a year? That is a sin. LD 1595 takes on this real sin by eliminating low income families from the income tax rolls completely.

Taxes on working families in Maine are too high.

I sponsored LD 705, An Act to Relieve the Income Tax Burden by Revenue Neutral Means. Guess what? The Tax Committee killed the bill.

Actually, I’m grateful they killed LD705. Why? They kept my ideas (cut taxes on necessities – income, property – and pay for it by taxing frills and eliminating unfair sales tax loopholes). They collected many more good ideas from numerous studies and bills, then crafted an excellent comprehensive plan.

According to Maine Revenue Service, approximately 50,000 households, more than 10 percent of Maine households who pay income taxes now, won’t need to pay one dime in income tax. Fifty thousand households means easily over 100,000 low-income people are relieved from paying any income taxes.

Eliminating income taxes for a hundred thousand people? Just the beginning.

According to the Maine Revenue Service, $50,000 is the median gross income for a family of four. Fifty grand for a family of four is the essence of middle class in Maine.

If LD 1595 passes, hundreds of thousands of these typical working families keep cash in their pocket at tax time.

This typical Maine working family would get a tax cut because LD 1595:

1) eliminates the marriage penalty;

2) conforms to the federal personal exemption;

3) raises the homestead exemption reimbursement which should hold down mill rates;

4) cuts real estate transfer taxes for all homes under $200,000. (Since Maine’s median home price is $160,000, the great majority of home buyers will have their real estate transfer tax cut.);

5) cuts the highest marginal rate (which kicks in at an income far below the state median).

According to Maine Revenue Service, approximately 453,147 families will get a tax cut under LD 1595.

If you oppose cutting taxes for almost all of the working people in Maine, oppose LD 1595.

I wish LD 1595 cut taxes even more for working families, but make no mistake: this a net tax cut for working families.

How would Maine pay for these tax cuts? By telling lobbyists no more shenanigans.

Every year big money lobbyists swoop into Augusta representing special interests, creating a Swiss cheese of unfair loopholes in our sales tax code. “Loophole for you, but not for you, loophole for you but not for you …”

Take lodging. I took my sons out of state for vacation. I considered who we’d visit and what we’d see. I didn’t consider lodging taxes! Nobody does. Lodging is a frill – an extra – largely affecting out-of-staters. Similarly out-of-staters pay a disproportionate share of our amusement park taxes, ski lift taxes, and golf taxes. We are leaving out-of-state money on the table while taxing diapers for Maine kids.

This bill does not propose a sales tax increase; it proposes a more fair application of existing sales tax. For decades experts have known we must stabilize our tax code. Until we do, we punish Mainers with state revenue radically fluctuating up and down. The unstable tax code is a set up for unstable budgets, harming Mainers, harming our civic process.

The great legacy of a stable tax code is not immediate, but it’s the most important benefit of this package for the next generation.

Martha Stewart will survive LD 1595. If Martha Stewart buys a new place in Maine, she’d pay a little more for her real estate transfer tax, and for her gardener, interior decorator and limousine service.

Because I serve on the Judiciary Committee, I’ve been forced into lengthy debates about gay people. Do you think average Maine parents lie awake hoping state government pokes its nose into the sex lives of law abiding citizens? No! Do you think average Mainers want more specialized license plate bills? No.

More bills about making Moxy the official state drink? Black flies the state pest? No! And No!

We do lay awake worrying about property taxes and income taxes and the future of our children. LD 1595 cuts income and property taxes. Finally!

LD 1595 is grown-up legislation. LD 1595 will put a little more money in the pocket of 453,000 Maine households – essentially all of Maine’s working people – and stabilize our tax code simultaneously. Want to cut taxes for working families? Tell your legislator: support LD 1595.

Rep. Sean Faircloth is a Democrat from Bangor.


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