December 23, 2024
Column

The elusive butterfly of tax reform It’s time to stop playing shell games

After months of hard work, a tax reform package was voted out of the Taxation Committee on Wednesday. While the package came out of the committee with a majority of members in support of the measure; I could not, with good conscience, vote in support of the package.

I agree with the committee that we need to reform the way that we collect revenue in our state. We cannot continue to lay such a heavy tax burden on our citizens and expect them to reach prosperity. I know that the committee worked long and hard to come to a consensus on a strategy to combat the very serious problems that we have in our current tax structure.

However, the plan does not accomplish true tax relief. Rather than reforming our tax system, this plan just changes how we are collecting taxes. Mainers still would be paying heavy taxes; in fact they will now be paying these taxes on more of the things they buy everyday. The proposal reduces the income tax, but expands the sales tax in order to compensate for the income tax reduction. Rather than having taxes taken out of their paychecks, Mainers will be paying taxes when they go to buy the things they need. Under the proposal Mainers would be paying taxes when they go to the movies and even when they get a haircut. A lot of Mainers can get behind so-called sin taxes, but when we start taxing landscaping and other types of home improvement, we are creating a disincentive for people to take care of their property.

I think that there are some very serious flaws with this approach. While my primary concern is that we are simply taking money out of one pocket and putting it in the other, I am also worried that this will hurt Maine businesses. With more taxes to be paid when customers go to the cash register, business owners have a significant reason to fear a drop in sales.

The other loser in this package is the state itself. If we expand the sales tax even further, we would see many more Mainers headed across the border to our friends in New Hampshire to buy their goods. Not only would Maine businesses lose, but the state would also lose that tax revenue as this practice picks up. We should not be encouraging this trend, and that is just what the tax reform bill does.

The same day that the committee voted out the tax reform bill, they also voted out a proposed constitutional amendment to require a two-thirds vote in order to raise or lower sales, excise or income taxes. This would truly reform the way that taxes are placed on Mainers. I support the amendment as a significant step in the right direction. Over the years, it has been far too easy to increase the taxes Mainers are paying and to create new taxes. Should we pass it, this amendment would ensure that the Legislature is much more deliberate in the way that it chooses to collect revenue.

I would urge all Mainers to ask some very serious questions about what the Taxation Committee has proposed. I think that in the end, Mainers want tax reform that reduces the burden on them, not a plan that will simply move money around without providing any relief.

Rep. Herb Clark, D-Millinocket, is a member of the Taxation Committee and represents House District 10.


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