Sen. John Patrick’s column left me speechless (July 15).
As House chairman of the Legislature’s Taxation Committee, I realize that tax policy is complicated. However, I had never seen so many major errors in any column about taxes, starting with the most fundamental facts.
The column, “Big tax cuts for the rich, crumbs for the middle and working class,” argues essentially that because Republicans cut income taxes, we are “not paying more than $700 million of state government bills.”
According to Patrick, Republicans “pushed an unfunded $800 million per year cut in taxes.”
Now for the facts, as verified by Michael Allen, director of Maine Revenue Services:
For the next tax year, starting Jan. 1, 2013, the tax cuts come to $97 million. For the 2014 tax year, the total is $189 million. The cuts add up to $235 million in 2015, when all reductions are fully phased in. These figures include all major tax cuts by the 125th Legislature, even the increased pension income exclusion enacted in May.
As you can see, these numbers are a far cry from $800 million per year, but Patrick actually amplifies the mistake. He writes, “Those tax cuts amount to 26.7 percent of the state’s $3 billion annual General Fund.” Not quite.
According to MRS, in 2015, the tax cuts represent 7.1 percent in “revenue reductions.”
It is bad enough that Patrick uses a fabricated number to advance his “argument,” but he continues with more bogus statistics regarding “big tax cuts for the rich.” For example, he claims that “Maine households in the top 10 percent of household income earning $122,000 or more will enjoy average savings of $5,384.” He’s only off by at least 500 percent.
According to MRS, the top 10 percent will see an average reduction of $994 in 2013.
He also declares that “households with incomes of $366,000 will enjoy average savings of $21,638 per household in tax cuts.” I think we’d all agree that’s a big tax cut for the rich. Sadly for Patrick, it’s incorrect — by a country mile.
According to MRS, that top 1 percent will get a cut of $3,015 in 2013.
Here’s another gem: While he asserts those giant, non-existent cuts for higher earners, he writes that “the 136,000 lowest income households will enjoy a tax cut of $1.” That’s right, one dollar. Rather puny, wouldn’t you agree?
The truth, however, is that the tax changes remove all income tax liability for 70,000 low income tax filers. They will be paying zero income tax.
Meanwhile, he conveniently forgets to mention that, beginning in 2013, some 460,000 families will see an average decrease of $337. He also overlooks the fact that, in 2013, a family of four electing the standard deduction will owe no income tax if their adjusted gross income is below $35,700, versus the current no-tax threshold of $21,400.
It is indeed unfortunate that such a wildly misleading column appeared in a major Maine newspaper. Our citizens need the truth, not an absurd, partisan hatchet job.
State Rep. Gary Knight, R-Livermore Falls
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