AUGUSTA – Should Maine tax more for soda, beer and wine?

Should movie tickets, amusement rides, golf courses, water slides, haircuts, tanning parlors and pet grooming be subjected to the 5 percent sales tax?

Should Maine’s tax on restaurant meals and hotel rooms go from 7 to 8 percent?

And should Maine bring back the snack tax?

A legislative Taxation Committee voted yes, so that property and income taxes can be lowered.

The tax reform proposal, L.D. 1595, was unveiled Tuesday during a State House news conference by Democratic legislators and organizations representing thousands of Catholics, labor unions, advocates for the elderly, children and the poor.

The tax reform plan received no Republican votes in committee, but Republicans would embrace it if it mandated that taxes could not be increased without two-thirds votes from legislators, House Minority Leader David Bowles, R-Sanford, said.

Taxation Committee member Rep. Deborah Hutton, D-Bowdoinham, said her committee’s plan is revenue neutral, that overall it would not raise taxes considering how it would lower income and property taxes.

Sen. Joseph Perry, D-Bangor, co-chairman of the Taxation Committee, said the tax reform bill faces a hurdle getting passed in the House and Senate in the final days of the session, which will not adjourn in time for today’s deadline.

“But when members weigh the merits, I think this bill will pass and become law,” Perry said. The plan addresses problems that have plagued the state’s tax system for years, including surpluses when the economy’s strong and deficits when the economy is soft.

“This would modernize our tax code, stabilize revenue,” shift more taxes to out-of-staters, “reduce Maine’s burden and deliver significant income tax relief to all Mainers” and lead to significant property tax reductions, Perry said.

Speaking for the “Taxpayers for a Fair Budget Coalition,” a coalition representing 20 statewide organizations, Kathleen McGee called the bill historic. It represents the first time the Taxation Committee has passed a significant tax reform package, she said, adding it’s what Mainers want.

“The voters of Maine have been clear what it is they want,” McGee said. “A year ago they passed (referendum) 1A which asked for the state to pay 55 percent of school funding. Last year, we defeated the Palesky tax cap,” where people rejected a proposal that would have cut their own taxes to support their communities.

But there’s plenty of opposition, especially from businesses that would be subjected to a new or higher tax.

The Maine Restaurant Association has a member alert on its Web page urging restaurants to contact their senators and representatives asking them to reject L.D. 1595.

The bill puts restaurants at “grave risk” by increasing taxes on meals, alcohol and soda, which would decrease business, according to the association. Restaurants and patrons already pay enough taxes, and 70 percent of those who eat in Maine restaurants are Mainers, “not people from away,” according to the association.

This plan would hit Maine low-income people disproportionately, because eating out may be their only affordable entertainment venue, the association warns.


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