Special Session for Tax Reform Looks Likely
I'm not sure what "key elements" of the proposal legislative leaders must find consensus on, but it looks like LD 1595 will be back this fall.
Ernie Marriner, chairman of the Tax Reform Committee at the Maine Chapter of the American Association of Retired Persons, said the proposal would bring tax relief to many Maine families.
"LD 1595 lowers income and property taxes for Maine residents - substantially for those who need it most - and pays for it by closing special-interest sales-tax loopholes," Marriner said in a prepared statement. "Our members believe this to be an essential step in assuring a stable revenue stream and protecting vital services."
As proposed, the bill would lower the state sales tax from 5 percent to 4 percent, but would raise taxes in numerous other areas including liquor and restaurant meals. The taxpayers group said the bill would further expand the circuit-breaker property tax relief program and fully fund the Homestead Exemption, which is now only half-funded by the state.
State Rep. Deborah Hutton, D-Bowdoinham and a member of the Legislature's Taxation Committee, supports the tax overhaul claiming Maine's sales tax base is "one of the narrowest in the nation" and is largely responsible for the state's "boom and bust budget cycles." She said the bill would attempt to bring stability to the state's tax structure, which now draws about 30 percent of its revenue from the income tax, 21 percent from the sales tax and 44 percent from the property tax. Leading economists long have recommended revisions that would equalize the burden to one-third for each revenue component.
I've talked to at least one legislator who was reticent to support the bill in June but says the time is right now. This kind of broad-based tax reform has been promised for decades and may finally be close.
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