Members of the Maine Legislature’s taxation committee will hold a public hearing Tuesday on LD 1929, “Resolve, Establishing the Commission To Study Fair, Equitable and Competitive Tax Policy for Maine’s Working Families and Small Businesses.” The bill, sponsored by Rep. Ryan Fecteau of Biddeford and co-sponsored by members of the taxation committee, including Rep. Kristen Cloutier and committee chairman Rep. Ryan Tipping, appears to be a taxpayer-funded tax policy talking points memo for the upcoming election.
LD 1929 is one in a long list of fake emergency bills admitted into the Second Session by Maine’s Legislative Council. The lack of an existing commission to study tax policy, for whatever purpose, is not “immediately necessary for the preservation of the public peace, health or safety” as required by the Maine Constitution.
Of course, the real punch line here is the task of the committee itself – to study “fair” and “equitable” tax policy. These two buzzwords are regularly used by liberals to justify radical tax increases, and both are extremely subjective terms. What’s fair and equitable for one person may not be for another. Redistributive tax policies that rob Peter to pay Paul have never worked, but you can be certain this is the underlying goal of the committee.
Interestingly, the bill’s drafters did little to hide its true purpose. The duties of the commission are outlined in Section 5 of the bill as follows:
“…the commission shall study issues associated with the impacts of tax policy on the State’s working families and small businesses and shall develop recommendations designed to ensure that the tax policy of the State is fair and equitable, while ensuring the State remains competitive. In examining the issues, the commission shall consider measures designed to level the playing field for small businesses and to aid entrepreneurs and the importance to working families and businesses of adequately funding important government services, such as aid to local services, education, infrastructure and affordable health care and propose measures that ensure these services are adequately funded. The commission shall also evaluate the direct impact of any proposed tax changes on after-tax income by income decile.”
To be clear, the commission is being created to propose tax increases on hardworking Mainers and grow government in the name of helping small businesses and working families. It must submit a report of its work by November 4, 2020, the day after the next general election.
Maine’s income tax is already too high and uncompetitive compared to our lone neighbor, New Hampshire, as well as the rest of the country. New Hampshire does not levy an individual income tax on its citizens. In contrast, Maine has the 11th highest top marginal income tax rate in the country at 7.15 percent. The solution is simple: work to reduce and eventually eliminate the individual income tax.
The commission established in LD 1929 would likely propose something similar to LD 1647, carried over from the First Session, which would charge higher earners a tax equalization assessment to ensure they pay the average effective tax rate in the state. This is nothing more than another attempt to “tax the rich” by claiming they do not pay their fair share.
The bill sponsor’s leadership PAC called our current tax system unfair because individuals who make $50,750 are in the same bracket as someone who earns millions. However, there are only 1,400 people, or 0.2 percent of filers, who earn more than $1 million in Maine. Additionally there are less than 18,000 people, or 2.7 percent of filers, who earn more than $200,000 annually in Maine.
Further, the average millionaire in Maine pays $153,725 in taxes under our current system whereas someone who earns between $50,000 and $75,000 pays about $2,000 annually. The only thing unfair about this scenario is that we’re taxing individuals’ labor in the first place.
Instead of pitting people against one another, elected officials should work together to improve our competitiveness by reducing the individual income tax for all Mainers.