Many people may not know that a single mother of two who works a full-time minimum wage job pays nearly twice the proportion of her income in taxes than a millionaire.
It’s true. And it is simply unfair.
We need a tax system that is fair to all Maine families.
The average Maine worker earning $48,000 annually pays a higher tax rate than a millionaire does. The reasons for this disparity are the regressive nature of sales and property taxes and the use of loopholes, credits, exemptions and deductions available to the wealthiest.
The highest-income households in Maine now pay about 10 cents per dollar of income on state and local taxes. The average household pays slightly more than 11 cents and the lowest-income household pays 17 cents.
House Majority Leader Seth Berry of Bowdoinham has submitted a “Buffet Rule” bill to fix this problem. The bill would correct inequalities in the tax code and cut taxes for hundreds of thousands of middle- and working-class families.
Under Berry’s proposal, the state’s highest earners would pay the same rate as everyone else. Those making $350,000 or more would, on average, pay one cent more per dollar of income.
This simple and straightforward plan would equalize the tax code and bring in revenue. Maine Revenue Services projects that the measure would raise an estimated $200 million in the first biennium, about half the budget gap created by new Republican tax cuts largely benefiting the wealthy.
Starting in 2016, the new revenue from Berry’s proposed Buffett Rule would go to tax cuts for hundreds of thousands of Maine families. The average tax cut would be $150.
Compare that with the $425 million property tax hike in Gov. Paul LePage’s budget. His budget passes the tough decisions and the tax burden to Maine communities and their residents. His budget eliminates the revenue-sharing system between the state and municipalities, cuts key property tax reduction measures and reduces excise tax revenues needed for local roads.
Figures from the Maine Economic Policy Center indicate the typical Maine family would see a $650 tax hike under the governor’s budget.
It is time to reduce taxes on those who pay the most while earning so little and equalize rates so others are paying their fair share. Unfairly burdening the middle class while giving tax cuts to the wealthy is not how we should be structuring our tax code.
The Buffet Rule is a solution whose time has come. Four out of five Maine voters support the approach, according to the Maine People’s Resource Center. Seventy-two percent of Americans support it, according to a CNN poll.
It is time that we do what is right for Maine’s hardworking families. We need to support our middle class by creating a tax system that is fair, balanced and clear. Their success is the key to Maine’s prosperity.
Rep. Paul Gilbert, D-Jay, is serving his third term in the Maine Legislature and serves on the Labor, Commerce, Research and Economic Development Committee.