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For Immediate Release

Date: 04/23/13

Democrats Unveil Massive Middle Class Tax Hike Package

Slew of tax hikes represents largest tax increase in Maine's history

AUGUSTA - Democrats today unveiled Part One of their massive middle class tax hike package today before the Legislature's Taxation Committee. Today's rollout was focused on the portion of the omnibus tax hike package that purports to cast the entire package as a "tax fairness" measure that hurts only "the rich."

The most punitive of these "tax-the-rich" measures only closes about 5.7 percent of the budget gap, however, leaving the dirty work to be done on Friday, when Democrats will unveil Part Two of their tax hike package, which inflicts a roughly $300 million per year tax increase on Maine families and small businesses through sales and other regressive taxes.

Today's bills include LDs 692, 834, 1113, 1124, and 1256, and each aims to increase taxes on those making more than $100,000 per year. The top income tax rate currently starts at $19,950 per year, and was recently reduced from 8.5 to 7.95 percent. According to Michael Allen of Maine Revenue Services, rolling back that cut for those making over $100,000 per year would raise only $25 million per year, or 5.7 percent, of the state's $880 million biennial budget shortfall.

"We're all for a fair tax code, but if we're looking to a tax hike package to balance the budget, there simply aren't enough rich people to make it happen," said House Republican Leader Ken Fredette (R-Newport). "Punting the problem of government overspending to the taxpayers will affect every Mainer, regardless of income or occupation. That's why Republicans are focused on slowing the rate of government growth."

Today's hearings on the comprehensive tax hike package come on the heels of a morning vote to allow motor vehicle fee increases and yesterday's committee votes to reject measures in the Governor's proposed biennial budget that would curb the rate of growth of state government.

"Democrats are being obstinate in their rejection of even the most modest spending reductions," said Fredette. "They are laser-focused on forcing Mainers to open their wallets and enable big government overspending."

On Friday, the Taxation Committee will consider measures to increase the lodging tax from 7 to 12 percent, the liquor tax from 7 to 9 percent, and the general sales tax from 5 to 6 percent. According to Maine Revenue Services, raising the lodging and sales taxes under those bills would raid the private sector to the tune of about $166 million per year, or 38 percent of the budget gap. This comprehensive revenue-grab would represent the largest tax hike in Maine's history.

"These are taxes that hit the middle class the hardest," said Fredette. "Democrats would like to think that we can close the budget gap by taxing somebody else—the rich or the tourists. But the reality is that their tax hike package hits every Mainer, and hits them hard."

Since 1992, municipalities have increased property taxes by 123 percent, while state government spending increased 89 percent in comparison. Maine's total state and local tax burden ranks seventh in the nation.

"We cannot enable more government greed," said Assistant House Republican Leader Alexander Willette (R-Mapleton). "When we ask Democrats how much the taxpayers should give, their only answer is more, more, more."

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Contact:
David Sorensen
Maine House Republicans
Tel: (207) 205-7793