Race: People’s veto of tax reform law (Question 1)

TV ad: Two versions, one theme — Reject new taxes

Length: 30 seconds each

Sponsor: Save the Mortgage Interest Deduction, a PAC funded by the Maine Association of Realtors

Text, audio and videos:

Version 1

Announcer: “If Question 1 doesn’t pass on June 8 it means another government bailout for the wealthy and Maine people get shortchanged … again. In fact, as Maine’s wealthiest 1 percent gets tax cuts, you will end up paying, with large tax increases and removal of taxpayer itemized deductions for mortgage interest, medical expenses and charitable contributions. Along with over 100 new tax increases on things like auto repair, meals and lodging and pet services. That’s just not fair.”

Image: Key text highlighted at the beginning, which transitions to hundred dollar bills with “government bailout” written on screen, followed by a person wearing a blue plaid shirt and blue jeans with a hand holding change. Images of lobster, a dog and a car getting fixed are displayed, then the screen fades to black and the words “just not fair” flash individually on screen.

Version 2

Announcer: “Every day, business owners like Mark Duval of Duval’s Service Center see Maine people struggle to keep their cars working. Question 1 proposes 100 new taxes on things like auto repair, movie tickets, house cleaning and dog grooming, just to give the rich big tax cuts. That’s just not fair. Let’s have real tax relief for Mainers. Vote yes on 1 to reject 100 new Maine taxes.

Image: Mark Duval, in front of his business, transitioned to a series of photos with TAXED in red lettering stamped on: a car getting fixed, movie tickets with popcorn, someone vacuuming and a dog getting washed. Next, a man with a nice suit putting hundred dollar bills into his pocket and again, the words “just not fair” flashed on screen. It ends with a ballot with a check next to the word, “yes.”

Purpose: To convince voters that the new tax reform law will increase taxation in Maine and provide relief only to wealthy Mainers.

Accuracy: The assertion in the first ad that the new tax reform law results in a government bailout for the wealthy is both nonsensical and wrong. The legislation, which is facing a repeal vote on June 8, is revenue neutral, which means the total amount of taxes collected will remain the same no matter what happens — there is no “government bailout” to be had.

The new legislation is expected to result in 88 percent of Mainers seeing a reduction in their overall tax burden, according to Maine Revenue Services, a non-partisan state agency. The state’s wealthiest do not benefit disproportionately; actually, individuals earning $250,000 a year or more will pay a higher income tax rate — 6.85 percent versus 6.5 percent for everyone else. In fact, many Mainers will end up paying less than the new 6.5 percent rate because of a new tax credit system that favors low- and middle-income taxpayers. Right now, individuals earning more than about $20,000 a year are taxed at 8.5 percent.

The first ad correctly points out that the measure eliminates state itemized deductions, but fails to mention that they are replaced by the aforementioned new tax credit that phases out for higher income individuals. The new standard credit for individuals would be $700. For those who itemize, the credit would be $400 for individuals, plus 5.5 percent of all their federal itemized deductions, for a total credit of up to $1,150. Those are credits in addition to the lower income tax rate. According to MRS, 95.6 percent of Maine income tax payers would pay less under the new law.

The end of the first ad and the entire second ad focus on the expansion of Maine’s 5 percent sales tax to items previously un-taxed. This is part of how the income tax reductions are paid for, in addition to increasing the meals and lodging tax from 7 percent to 8.5 percent. There are about 180 sales tax categories identified by national groups and right now Maine taxes 25 of those. That number will double under the new law and would indeed include dry cleaning, movie tickets and dog grooming. And while Mainers already pay sales tax on automotive parts when they visit the mechanic, sales tax would also be applied to the labor portion of their bill.

Our view: Nobody likes paying taxes, so putting a good scare in people about paying more taxes is super easy, and the vote “yes” on 1 ads go with the easy scare.

There is so much misinformation in these ads, it’s tough to sort out the truth.

The truth is out there, though — you will just have to work for it.

The Maine Revenue Service was good enough to put together an online calculator so you can really see what this tax reform proposal means to you based on filing status, income and the number of people in your family. Filling it out takes about the same amount of time it takes to watch a version of the above ad, and you’ll get the information you really need to decide your vote.

Here’s a link to the truth: