While Hawaii, Oregon, New Jersey and other hard-hit states hiked personal income taxes this year to generate revenue, Maine drew national attention for doing the opposite. Gov. John Baldacci (D) and the Democratic-controlled Legislature replaced Maine’s graduated income tax system with a new, lower, 6.5-percent rate for most residents in a move that was hailed by many conservatives as the right thing to do during a recession.
“At last, there's a place in America where tax cutting to promote growth and attract jobs is back in fashion. Who would have thought it would be Maine?” The Wall Street Journal editorial board wrote under the headline “Maine Miracle.”
Today, however, comes word from the Bangor Daily News that Maine’s tax changes could be challenged at the polls next year. State election officials have certified that opponents of the changes have collected enough signatures to let the voters have their say.
The tax package has drawn criticism — from Maine’s minority Republicans — because it offsets revenue lost through the income-tax reduction by expanding the state sales tax so it applies to more services.
“This Democrat tax on services would result in a permanent expansion on Maine’s sales tax, and Mainers are eager to repeal it,” a Republican state senator said, according to the Daily News.
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By Martin Sheehan on Nov 10, 2009 12:49:40 PM
The Maine Legislature realizes that they have so screwed up the Maine economy that incomes are actually shrinking, and are not likely to grow in the near future either... which is why they are expanding the consumption-based Sales Tax.
Less reliance on the Income Tax will "stabilize" (their word) state revenues. They are essentially saying: "Jobs, Schmobs... we STILL need the taxes from somewhere!"
That their policies extinguish job opportunities are immaterial to them - it's all about preserving their revenues.
= = =
The same folks also claim that they "cut" state spending. That is a half-truth. Spending IS lower, but they didn't want to cut a thing... they simply ran out of money! It's about like claiming you saved money by spending a weekend in New Jersey instead of a month in France...
Not spending money you never had is quite different than "saving."
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Maine Miracle
By Jonathan lbrecht on Nov 10, 2009 12:30:19 PM
Don't believe the Republican Senator. Mainers are not "eager" to repeal Maine's Tax Reform measure LD 1495 which has gained wide support throughout the state. You see Republicans can't get elected in Maine given their failed economic views. So having failed to block tax reform they started a repeal campaign that abuses one of Maine's more uncommon constitutional provisions. They needed over 55,000 signatures and they got just 1020 more than they needed. That may be challenged in the couts since the constitution does not require that signature gatherers tell the truth. Being Republicans many of these signatures may be fraudlent. If not the people of Maine will defeat the repeal so that we can get on with the work of making Maine's tax system fairer for the poorest of the poor.
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