Tax Reform: confused?

If you want to see tax relief, VOTE NO on Question 1.  If a YES vote prevails, it will raise the income tax rate by 30%. If a NO vote prevails, 95% of Maine residents will see an income tax reduction.

Business leaders across the state support a NO vote. Both Republicans and Democrats worked together on this landmark bill that Maine can’t afford to repeal. 

As former State Senator Karl Turner (R-Cumberland County) stated at a VOTE NO press conference: “What’s not to like? Nothing!”

Yet the amount of misinformation the YES side is spreading is staggering.  A NO vote will NOT tax social security or pensions.  A NO vote will NOT remove business deductions or take away home mortgage deductions.  (The benefits of mortgage deductions will be realized in a different way that is actually MORE beneficial for most taxpayers.)  Don’t be fooled!

Please read below and visit www.nohighertaxes.com to learn the facts.  

The list being circulated about new sales taxes is particularly misleading.   

First and foremost, the YES side never mentions any of the TAX REDUCTIONS that result, even though reductions in taxes on Maine residents far outstrip any tax increases.  

According to Maine Revenues Services, Maine residents in 2011 will receive tax savings totaling over $107 million, offset in part by $53 million in new sales taxes.  The NET impact on Maine taxpayers is a tax reduction of over $54 million. 

Nearly 90% of Mainers will see a NET reduction in their total taxes AFTER any new sales taxes are paid. 

If someone offered you $1.07, but said it would cost you 53 cents, would you take it?  I sure would!   That’s exactly what’s happening here, except the benefit is multiplied 100 million times!

VOTE NO for a smarter and fairer tax system   

The biggest problem with Maine’s tax code is the high level of income taxes (including taxes on small businesses) and capital gains taxes, NOT sales taxes.   In fact, Maine has one of the narrowest sale tax bases in the country, taxing far fewer categories of items than many states.  (And Maine will continue to tax fewer categories than other states after a NO vote prevails.) 

Likewise, Maine’s meals and lodging tax (at 7%) is one of the lowest in the nation. (The national average is over 12.5%.)  At the new rate of 8.5%, Maine will still be lower than New Hampshire and Vermont and most everywhere else.    

Any economist will tell you that Maine’s tax system is weighed far too heavily toward income taxes and too little toward sales taxes (including our low meals and lodging tax).   

A smart “re-balancing” will reduce the tax burden on Maine’s residents. That’s because a sizable percentage of sales taxes are paid by non-residents, whereas all the new revenues flow back as tax cuts to Mainers.  Over 95% of Mainers will see an income tax cut, and nearly 90% will see a NET tax reduction, while ALL Mainers will benefit from a tax system that spurs economic development and creates new jobs!  (There will be MORE money in Mainers’ pockets, which means MORE money spent at Maine businesses!) 

And the new system is fair:  Each income group will pay the same proportion of taxes as it does now. But because the resident tax burden will be lowered by $54 million, every group wins—whether low, middle, or upper income. Everyone!  (Special credits provide relief to seniors and low income people who may pay little or no income tax.)

The conservative Tax Foundation has praised this plan as being sound tax policy.  “A positive step forward,” says Staff Economist Kail Pagitt.  (Listen to an informative podcast at www.taxfoundation.org/podcast/show/24867.html.)

The progressive-leaning Maine Center for Economic Policy supports a NO vote and explains how Mainers will benefit when non-residents pay more of their fair share.  (See their report “Tax Reform Benefits Maine Households” at www.mecep.org/)  

The Wall Street Journal called the bill “The Maine Miracle.”

This is good stuff!  Supporters of a YES vote are simply NOT telling you the full story.

The question is simple:

            Do Mainers want to repeal a bill that cuts taxes and creates jobs?  NO WAY! 

One business leader summarized his reasons to VOTE NO in this way: 

“Why should my employees pay higher taxes so that visitors to Maine can get tax breaks they don’t need or expect?” (Wick Johnson, President of Kennebec Technologies) 

Learn more about how a NO VOTE will cut your taxes and help Maine at www.nohighertaxes.com.