I must take issue with Rep. Seth Berry’s comments in his guest column Aug. 26. I am deeply concerned that, as a legislator, he does not have a firm grasp of taxation while sitting on the Taxation Committee in Augusta.
Berry indicates that a single parent earning minimum wage ($12,000 annually) will pay 17 cents on the dollar in taxes, to which I respond — poppycock.
I call for Rep. Berry to provide an exact accounting of each tax paid by that fictional single parent.
A single parent earning $12,000 would mean he or she works 30.75 hours per week at minimum wage. But at that level of income, she would pay no federal income tax and could receive back from the federal government an earned income credit of $3,094, plus a child tax credit of $1,000.
On her state income tax, she would have no income tax due and, under the newly-implemented tax plan, could earn even more money each year before any state income tax was due.
The only payroll-related tax she would pay would be slightly less than $600 in Social Security/Medicare taxes. Thus, her net tax would actually be $3,500 paid to her, not taken from her each year.
Given that $3,500 is added to her income, she would have to then be taxed on other items totaling roughly $5,540 each year to get to the 17 percent tax figure Berry claims she now pays.
Again, I call for Rep. Berry to provide a complete accounting of what taxes this person pays.
What Berry and others fail to mention, in each and every discussion, is the real culprit in the tax-due discrepancy: Social Security. That annual payroll tax is capped in 2012 at $110,100 — meaning anyone earning more than that amount stops paying in. Thus they have almost 5 percent more of their pay to take home and, in exchange, are capped on how much their retirement benefit can be.
The problem lies in federal taxation, not in anything done to help working Mainers.
Robert Reed, Lewiston