All proposals for altering our tax structure need to be considered
The Legislature has once again sidestepped the critical problem of predatory property taxation, a human rights issue which affects every Maine homeowner. We need to unite as a caring people to solve this devastating problem.
Unjust property taxes in this state, through constant revaluation, has taxed many far beyond their ability to pay, forcing them to lose the sacred space of their homes. It has been unfair to all, most to people who live near the water.
Not a wealthy person, I was fortunate enough to buy waterfront property at a price I could afford 27 years ago. Revaluation has now pushed my property assessment to more than 10 times my purchase price, resulting in almost 50 percent of my income going to property taxes.
Needless to say, this is a huge burden in my retirement years. Many of my neighbors are also gravely impacted.
While we appreciate attempts to provide the Circuit Breaker program as relief, it’s inadequate, and doesn’t compensate for the unfair reassessment of property taxes when one earns no income.
The governor is right when he calls for a constitutional amendment to freeze our unjust revaluations. Some amendments to this bill need to be made to make it fair for all residential and business property owners.
The governor’s plan deals only with the “land” that is purchased; it does not include the building. This should change to make the entire parcel subject to the freeze. If a homeowner needs to improve their home, it should not be taxed until the property is sold. Such improvements should be considered an investment in the future, and any monetary gain at the time of sale would be recouped by the state in the transfer tax.
In the meantime, the homeowner is improving their property, which enhances the neighborhood. They are employing construction workers, who pay taxes. They are also paying taxes on the materials used to improve and expand the home – making the wheels of the economy turn.
Home investment will increase its taxable value when it eventually sells, a win-win situation for all concerned. This is the same as the stock market, where appreciation is untaxed until profit is realized at the time of sale.
Surely our homes – our sacred space – should be treated as fairly as stock.
Relieving high residential property taxes will require other tax adjustments.
Hundreds of thousands of tourists pour into our state to vacation and partake of our amenities throughout the year. They need to help us pay for developing and maintaining the amenities they enjoy. Lodging and restaurant taxes are far below other states, some of which as high as 10 percent.
We accept those higher taxes in those other states when we travel; our tourists should do the same.
Increasing our state sales tax to 6 percent would generate much revenue. We had a 6 percent sales tax before, and it was workable. We don’t need to add the frustrating burden of state taxes to many small service industries that are barely making it now. Nickel and diming people on every little service would be a frustrating burden on our people, especially low-income people.
A 1 percent increase in the general state sales tax would solve the problem, and would generate considerable income from high-ticket items.
Allowing municipalities to assess an additional 1 percent municipal sales tax to stabilize their infrastructure would greatly help our municipalities in rolling back property valuations to a manageable level for homeowners who have been severely impacted by the current unfair revaluation system.
States able to maintain balanced budgets in the face of reduced federal funding have taxed products of companies exporting natural resources. We need to follow their example, such as taxing spring water exported from our state, producing huge profits. If extractors doesn’t want to be taxed, let the state take over the operation and make it a public utility – preserving control over our valuable aquifers, and reaping all the profit for our programs.
And why is there a proposal to reduce the top income tax rate for the wealthiest of our population, when we are desperately trying to develop a workable budget for Maine? Income taxes are based on one’s ability to pay. We all need to pay according to our means.
The common good of all needs to be the common denominator in the process.
Those who have more should pay more. Those who have less should pay less. This is the only democratically fair and right thing to do to help all citizens in Maine achieve their potential.
Let’s join together as citizens and make this happen.
Ruth E. Taylor lives in South Portland.