In trying economic times, lawmakers cannot pass up plans to let Mainers keep money they earn.
In recent years Maine people, and people across the country, have been paying more for everything from food to heating oil to health insurance. While state government is limited in its power to reduce the burden placed on families by the rising cost of essential goods, there is one burden we can reduce: your tax burden.
The Legislature is currently considering a tax reform and relief package that will do just that. At the end of the day, if enacted, the average Maine person would have between $100 and $500 more in their pockets each year. In these difficult economic times, where pay cuts are common and pay raises all but non-existent, the state should do what it can to let Maine people keep more of the money they earn.
The details of the plan are pretty straightforward: It cuts the income tax rate from 8.5 percent to 6.5 percent and establishes a refundable tax credit that ensures most Maine people will pay far less than 6.5 percent. People at every income level will pay significantly less in income taxes. To keep the plan revenue-neutral, the sales tax will be extended to a few discretionary items such as amusement parks, limousines and pet grooming. It also modestly increases the taxes on meals and lodging, much of which is paid for by tourists.
Some will say that Maine people go out to eat, Maine people go to the movies; they are going to pay the taxes one way or another, so where is the tax cut? The truth is, though, the income tax cut is so large, and the additional taxes are so small, that the average Maine person will have $100 to $500 dollars more in their pocket even after they pay any additional sales tax.
For example, under this plan a person who receives the minimum tax reduction will have to go out to the movies four nights a week for a year before they pay more in taxes next year than they are paying now.
Ski tickets are another area where people have concerns. We get a lot of snow in Maine, but if you were to ski each day from Nov. 1 to April 1 you would still see a decrease in your overall tax burden.
That is how significant this tax reduction is.
The biggest benefit of this plan is the hundreds of dollars it puts in the pockets of working Maine people. But there are significant benefits beyond that. By broadening the way we collect our revenue, the state will see fewer fluctuations in the annual budget. That means fewer shortfalls and fewer painful cuts.
Additionally, a lower income tax rate means lower taxes for Maine’s small businesses. They will then have more money to reinvest in their company, hire new employees or give raises to existing workers. The low income tax will also help attract new businesses to Maine. Currently, entrepreneurs are discouraged by Maine’s high income tax; lowering it by more than 20 percent will make us more competitive with other states and provide Maine people with more opportunities to find good paying jobs.
The time for this plan is now. With the economy struggling, there is no better time to let Maine people keep more of their own paycheck. There is no silver bullet for getting the economy back on track, but by passing this plan, the Legislature can lower the tax burden for Maine people, help attract businesses to our state and stabilize the state budget.
At a time when resources are scarce and the need for action is great, putting a few hundred dollars in the hands of Maine taxpayers is an investment we can’t afford to pass up.

Sen. Deb Simpson, D-Auburn, represents Androscoggin County. Rep. Lawrence Sirois, D-Turner, represents Turner, Minot and Hebron in the Maine Legislature.


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