Renowned tax reform crusader Grover Norquist, president of the Washington, D.C.-based Americans for Tax Reform, said Monday that the tax bill Maine’s so-called Gang of Eleven has proposed is like offering Mainers a pizza sprinkled with glass shards.
“The gang of eleven’s plan is like baking a pizza and sprinkling glass shards on top,” Norquist said. “And when you say you don’t want to eat it, they say, ‘what, you don’t like pepperoni?’”
Norquist said the pizza – i.e. cutting Maine’s income tax to four percent and eliminating the estate tax – would be a great idea without the shards – an expansion of the sales tax amounting to a net tax increase. (Recommended: Gang of Eleven Touts Tax Increase…)
Norquist said the gang of eleven has recognized what people have been saying for some time about Maine’s uncompetitive and onerous income tax burden. “An eight percent top income tax rate is the kind of rate you expect to see in California and Maryland and [Washington,] D.C., but not in Maine,” he said. “It’s not a competitive rate – it’s crazy.”
“Five Democrats have said let’s take that rate down – Wow! – let’s stop for a moment and think through what tremendous progress that is in the world and in Maine, to have that recognition that this is a problem in Maine,” said Norquist.
“We’ve been through this in other states where people say we should have tax reform. There’s constituency for tax reform and the unions would really like more money, so let’s bring income tax rates down,” he said. “But then they turn it into a net tax increase.”
Said Norquist, “If you start off with an ironclad commitment like Reagan did in 1986 that reform will be revenue neutral, I think the Gang of Eleven would have a much better chance of passing something that would be good for Maine.”
Norquist said he was disappointed in the two Republicans – Rep. Gary Knight (R-Livermore) and Rep. Dennis Keschl (R-Belgrade) – who have decided to support the tax increase despite signing a pledge to their constituents not to raise taxes, but he also said that ATR’s pledge isn’t the only reason lawmakers should oppose the plan.
“It’s a bad idea for anyone – not just people who signed the taxpayer protection pledge – to support tax increases,” he said. “It’s a bad idea for Democrats who care about creating jobs in Maine.”
“Let’s have a debate on tax increase and let’s have a separate debate on tax reform, but not if it’s a Trojan horse for tax increases. And if we have these two debates, then the people of Maine will say yes to tax reform, but no to a tax increase,” he said. “We need to make sure that people understand that there is an effort to sneak a tax increase inside an effort for meaningful tax reform.”
While proponents of the gang of eleven’s tax increase believe the increased tax burden will be met by out-of-staters who visit Maine, Norquist said tourists will simply visit elsewhere or buy less as the cost of coming to Maine increases.
“If you’re from Massachusetts, it’s easy to go to New Hampshire instead of Maine,” he said. “Maine is sitting next to a state without a sales tax or income tax, which is why it has difficulties in terms of being competitive.”
Norquist said the veneer of bipartisanship associated with the gang of eleven’s plan is less a sign of compromise and more an indication that Republicans have abandoned principles.
“Bipartisanship is great if it means that the Republican virtue of not raising the overall tax burden is being defended while someone else’s idea of fairness and equity is being defended. But if bipartisanship simply means Republicans abandoned their position against net tax increases, that’s not an argument for that bill,” he said.
“That means, at the end of the day, that a few Republicans decided to abandoned principle.”
According to the limited information Democratic leaders in Augusta are allowing to be published regarding committee hearings, the Taxation Committee will consider L.D. 1496, An Act to Modernize and Simplify the Tax Code, on Friday at 10:30AM.