Yahoo! Maine has moved from the seventh highest income tax rate in the country to sixth. If we try hard, maybe we can… dare we say? … be number one!
But don’t blame this latest indignity on Tuesday’s rejection of a 2-percent income tax rate cut approved in 2009 by the legislature.
That would have dropped us way down to 25th on the list of states, but it’s not what pushed us up the list.
So, how did it happen?
Simple. Rhode Island moved down. Way down.
Last Friday, the General Assembly there “unanimously approved the most sweeping changes to the state’s personal income-tax system in nearly 40 years,” according to the Providence Journal.
Hey, wasn’t that what we were saying last year about our tax-reform plan?
Rhode Island was a bit more ambitious in its tax cutting. Its top rate will go from 9.9 percent to 5.99 percent, a nearly 4 percent cut.
Maine was only trying to muster a 2 percent reduction, from 8.5 percent to 6.5.
Rhode Island is now 25th among the states, about where we would have been had not voters repealed tax reform Tuesday.
Now Rhode Island is doing all the crowing, and you can practically hear it from here.
“This is the moment that we can change our reputation as a high-tax state,” the Journal quoted House Finance Chairman Steven M. Costantino as saying.
“Let’s tell our neighbors, ‘We are ready to do business.’ “
Hey, but it was our idea first!
Bragged State Rep. Helio Melo, this tax overhaul “will basically put us back on the competitive map.”
Yea, yea.
Said State Sen. Daniel DaPonte, lower taxes will send a message to “out-of-state entrepreneurs that Rhode Island welcomes them.”
OK, already.
Those Rhode Islanders really know how it rub it in.
But, really, our plan was better. In the Ocean State, only 60 percent of the state’s residents were projected to see an income tax cut. In Maine, that was upwards of 90 percent.
The strength of Maine’s plan was that it passed an estimated $400 million worth of sales, lodging and restaurant taxes to out-of-state visitors.
Now, after Tuesday’s vote, we are free to pay those taxes ourselves, while continuing to offer our visitors some of the lowest such taxes in New England.
Unfortunately, tax reform was complicated and the issue easily manipulated. It’s hard to argue facts with the TV image of a man secretly stuffing money into his suit pockets.
In fact, the nonpartisan analysis done by the Maine Revenue Service showed that the lowest-income Mainers had the most to gain from tax reform.
Now, as they say, the people have spoken. We’ve spoken up for higher taxes.
And in 10 years, another generation will wonder why nearly every other state pays lower income rates.
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