Old News Archive

Letter to the Editor - Tax Reform

June 30, 2007 - TRC

To The Editor;

For many years now the taxpayers of Maine have been pleading for tax relief from our Legislature. And there was an attempt to do just that during this last session in Augusta. Unfortunately, it just didnít work out.

The action that came from the Committee on Taxation was more like a bait and switch program than tax relief. There was much controversy with many speeches on the floor of the House and Senate and battles galore going on behind closed doors. The general theme for tax reform was to tax a multitude of services and, in turn, offer a decrease in your income taxes. However, it just didnít balance out.

As the bait, your income tax would go from a flat rate of 8% to 6% with no declared deductions. Interesting. Now comes the switch part. I received a possible list of services, written by Rep. Herb Clark from Millinocket, which would fall under the 5% sales tax for services. The list amounted to more than 133 different services to be taxed. Rep. Clark is a member of the Taxation Committee.

Personal care services included such items as haircuts and hairdressing, foot care, health clubs and elective cosmetic medical procedures. Personal property services included such items as dry cleaning, laundry, pet services, furniture and rug cleaning, meal preparation (Iíll bet Meals For ME would just love that one), storage rentals, vehicle storage and moving services. Real property services would include such items as electrical, plumbing, heating, painting and papering, tree service and removal, pest control, fire protection, chimney service, snow plowing and waste removal. Just about every amusement, entertainment and recreation service you can imagine would also be charged a sales tax. Items such as movies, fairgrounds, state parks, sports activities and the list goes on. Even music, dance, and physical fitness would be taxed. Entertainment services such as bands, disc jockeys and, get this, clowns would see a sales tax. I believe the most disturbing items to be taxed were caskets and urns and other tangible property in connection with funeral services. How disgusting !

With an income range of $17,967 to $24,125 yearly, the declaration regarding tax relief amounted to a savings of $143.00 for the year, after paying all taxes conceivable. Big deal. However, if one could earn $108,845 and up, a savings of $1,252 could be realized at the end of the year.

I spoke with a constituent who is a carpenter and he believed that the 5% sales tax wouldnít stop there. He would have to charge another 2 to 3% just to cover the cost of assessing and reporting to the state his sales taxes. Try to imagine a carpentry job costing $2,000.00 and then add another $100.00 just for sales tax !

How did the vote go in the Legislature ? In the House of Representatives the vote was 80 to 59 for approval of the tax reform bill, LD 1925, with no Republicans voting for this form of tax relief. At least the Senate was wise enough to see the folly of such a measure and voted it down 28 to 7. The bill failed. In the House there are 89 Democrats, 2 Unenrolled and 60 Republicans. In the Senate there are 18 Democrats and 17 Republicans.

Itís not over yet folks. The Governor has stated that heíll be back with another bill giving his constituents tax relief after the first of the year. However, thereís a rumor that weíll be back in Augusta in the fall. Please tune in for the next great adventure with more ďgreat ideasĒ from your elected Legislature.

Rep. Jim Annis
District 26

NOTE - This article reflects the views of the author and not necessarily those of the TRC Alliance Team.