Senator Courtney: Tax Plan Doesn’t Pass Straight Face Test

AUGUSTA – Senator Jon Courtney, of Springvale, in opposing the tax reform proposal put forth by the Legislature’s Taxation Committee, has called into question the projected benefits the committee has promised if the Legislature approves the plan. The committee’s plan aims to create some reductions in the state income tax and local property taxes through a massive expansion of the sales tax.

Among the provisions of the Taxation Committee’s proposal is a dramatic increase in the number of goods and services subjected to the sales tax that Mainers regularly purchase. Among the items on the list of newly taxed purchases are: haircuts, airplane repairs, newspapers, summer camps, snow removal, landscaping, car repairs, movie tickets, music lessons, security system installations, and civic organization memberships. Also included in the tax reform plan are increases in the meals, lodging and snack taxes.

“I heard from representatives of Oxford Aviation in Sanford who are very concerned about this plan,” Sen. Courtney said. “If the Taxation Committee’s plan goes into effect, 200 new jobs they were expecting to make available would be out the window because of the increased tax on plane repairs. If that’s the case, then we’re talking about people’s livelihoods. This whole thing is very scary.”

Sen. Courtney has also questioned the numbers offered by the committee as a result of their plan. The committee has suggested that over 620,000 Maine families would see an average tax decrease of $338, with over 70,000 Maine families seeing an average tax increase of $413, as a result of the complicated revisions to Maine’s tax code. “These numbers just aren’t convincing,” Courtney said. “I don’t believe the multitude of new taxes heaped onto the backs of Maine’s families and small business owners will be offset by the reductions the plan would put in place. In this bill, the Legislature asks the people of Maine to trust them, and they don’t have a very good record. When we finally see the effects of this tax shift, if the Legislature grants its approval, I think we will all find that this is just a clever way for state government to collect more tax revenue.”

The Senator identifies the proposed real estate transfer tax as another point of contention with the Taxation Committee’s plan. Currently, the seller and the buyer of property split a $4.40 tax for every $1,000 dollars of the sales price. The committee’s plan would raise that tax to $6.00, split between the buyer and seller, for every $1,000 in the sale price up to $250,000—an increase of over 36 percent. For transactions above $250,000 to $500,000 the tax climbs to $8.00 per thousand, and for any real estate transfer over $500,000, the tax is $10.00 per thousand.

“This is just another example of over-taxing Mainers throughout their entire lives,” Sen. Courtney said. “To increase by 36 percent the tax on Mainers just trying to live the dream of home ownership is going way too far.”

The Senator asserts that spending reductions, not smoke and mirrors are the only way to provide real and positive relief for the people of Maine. Massive government programs and low priority projects are eating up the general fund budget, making it unlikely, if not impossible, to return money to taxpayers. The committee’s plan, the Senator maintains, will perpetuate this problem by allowing the government to keep too large a portion of new revenue from the sales tax, without returning it directly to tax paying Mainers.

“It’s simple, if we reduce government spending we can finally provide widespread tax relief,” Sen. Courtney explained. “Tax shift plans and fuzzy math aren’t the positive work we need to make Maine a more affordable place to live and work.”

Although Sen. Courtney strongly opposes the plan developed by the Taxation Committee, he respects their efforts to reduce Maine’s income tax. The Senator himself has submitted a bill to reduce the Maine income tax, which would also require government to dedicate a significant portion of all excess revenue the State collects to go directly towards income tax reductions. The bill, LD 952: “An Act To Reduce the Income Tax,” is currently on hold in the Senate.

“The committee’s plan is not the direction the State should be headed. We need real tax relief, not a wolf in sheep’s’ clothing. This Legislature can do better,” Sen. Courtney concluded.

Sen. Courtney represents District 3, which includes Alfred, Limington, Lyman, Sanford/Springvale, and Waterboro. He can be reached in Augusta at 287-1505, in Springvale and 324-5467, or by e-mail at joncourtney@metrocast.net

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