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Snowe-Mello defends reforms that promote tax fairness

By Sen. Lois Snowe-Mello

(R-Poland)

In a recent Letter to the Editor, Senator Margaret Craven (D-Lewiston) took issue with my column, entitled “Legislature adjourns after enacting historic reforms.” Specifically, she questions the tax, health care, regulatory and welfare reforms that are already benefiting Mainers.

These reforms were adopted to restore balance to state government and promote jobs and opportunity for Maine people.

Unfortunately, Senator Craven criticizes a law that she voted for and uses it to argue against my column. Furthermore, in her haste to disagree with me, it appears that she doesn’t fully appreciate what she voted for. It is tough to argue with such logic without appearing impolite, but here goes.

LD 1043 contained tax relief for all Mainers and incentives targeted at small business job creation. Senator Craven incorrectly states that 70,000 filers she refers to as “bottom income earners” received an inconsequential tax reduction.

In fact, they were relieved from having to pay state income tax altogether. Maine Revenue Services estimates the average tax cut for these 70,000 filers is $115 in tax year 2013, not one dollar, as Senator Craven asserts.

Let’s assume for the purpose of argument that Senator Craven got her facts right, and it was just a tax reduction for those 70,000 filers. I still take issue with her contention that “under no conditions will having an extra dollar in your pocket yield better results for the economy.” Loosely translated, she is asserting that government is better at spending our money than we are.

Every day, I hear from people struggling to keep pace with rising food, fuel, utility and other costs. Some families are finding it difficult to support a basic lifestyle, let alone plan for a better future. When Republicans were put in charge two years ago, we set out to simplify the tax code and make it more fair.

Under previous Maine law, Democrats imposed the highest state tax rate (8.5%) on all individuals with taxable incomes of $19,950 and above and $39,900 for a married couple filing jointly. Think about what that implies: you were considered “rich” if you had taxable income of $19,950 or more!

Here are some other parts contained in the reform bill that Senator Craven and I voted for:

Investment credits to promote job creation in economically distressed areas;

A fuel tax sales tax exemption for commercial fishermen;

Exempting retirement homes from an over-zealous collection of a meals and lodging tax; and

Simplification and consolidation of state income-tax brackets.

Prior to the tax reform, the nonpartisan Maine Revenue Services (MRS) data indicated the wealthiest 10 percent of Maine taxpayers were paying 55.8 percent of all income taxes. They are projected to receive only 43.7 percent of the tax cut.

When the reforms are implemented, they will pay an estimated 57.3 percent of all income taxes collected.

At the time we acted, MRS concluded: “We estimate that the lower deciles, (lower and middle classes) will get a bigger reduction in income tax liability (in percentage terms) than taxpayers in the upper deciles.”

The reforms that we made are designed to give some relief to taxpayers while providing a basic social safety net that will be there for our most vulnerable citizens. They also focus on private sector job creation.

When we passed the law in 2011, the Beacon Hill Institute at Suffolk University estimated that the income tax cuts we adopted would generate 3,741 new private-sector jobs by 2015.

Be wary of politicians who practice class warfare and whose jobs plan includes more borrowing, bailouts and government jobs. Taxpayers must pay for all of those plans, and there are fewer taxpayers to feed ever-increasing demands.

In the future, I suggest that Senator Craven stick to defending improper and/or exorbitant spending at the Maine Green Energy Alliance, Maine State Housing Authority and the Maine Turnpike Authority (unless it involves an unfair toll hike that everybody opposes). I remain undeterred in my commitment to hard working families trying to build a better future.

(Note: The tax figures referenced in this column were reviewed by MRS to ensure their accuracy.)

 

Senator Lois Snowe-Mello chairs the Marine Resources Committee and is a member of the Insurance and Financial Services Committee.  She represents Maine Senate District 15, which includes the Androscoggin County communities of Auburn, Durham, and Poland along with New Gloucester in Cumberland County.

 

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