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WSJ praises new tax planThe Wall Street Journal ran a short piece on its editorial page today praising Maine as a place that "cuts tax rates on the rich." The newspaper lauds Maine Democrats and Gov. John Baldacci for passing the tax overhaul that lowers the income tax, raises the meals and lodging tax, and applies the sales tax to new goods and services. “This is a big income tax cut, especially given that so many other states in the Northeast and East -- Maryland, Massachusetts, New Jersey and New York -- have been increasing rates,” the newspaper writes. The editorial makes a fuzzy link by saying lawmakers cut the budget to pay for tax reform. (They didn’t. The plan pays for itself and budget cuts were a whole different animal.) It also mentions that the sales tax will be applied to ski lift tickets, but Baldacci had that pulled out as one of the things he wanted so he felt comfortable supporting the bill. It makes no mention of the possibility of a people’s veto led by the state’s top Republicans. You can check it out here: http://online.wsj.com/article/SB124571672694839297.html Bookmark/Search this post with:
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Statehouse reporter Susan Cover plumbs the depths of Maine politics to bring you the scoop on candidates, elected officials, parties and rainmakers. Tags2010 governor's race Arden Manning Barack Obama Blaine House Bruce Poliquin budget Chellie Pingree civic center Congressional conventions elections Elizabeth Mitchell gay marriage Gay Rights General Hannah Pingree John Baldacci Josh Tardy Kevin Raye Les Otten Lynne Williams Maine Democratic Party Mike Michaud Obama Olympia Snowe Parties Pat Flood Peter Mills Politicians Presidential Referenda Republican Rosa Scarcelli State budget Statehouse Steve Rowe Susan Collins taxes tax reform U.S. Senate |
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The CATO Institute, a libertarian think tank in Washington DC, made reference to the WSJ editorial on their blog in an entry titled "Maine's Supply-side Democrats", http://www.cato-at-liberty.org/2009/06/24/maines-supply-side-democrats/
The article focuses too much on the "RATE" rather than what it is applied to (a higher amount), just as the sponsors and the KJ writers. At least it mentions that there were more than one tax rate and the bottom ones (2.0% & 4.5%) were raised( the other rate was 7.0%). They got the tax cuts for the rich right. There is very little in this bill for anyone else. The tax cuts for most are far less than that the 2% implied. Would you rather pay 6.5% of $50,000 ($3,250) or 8.5% of $35,000 ($2,975)? Low and middle class taxpayers should expect no more that a .5% cut if they use the standard deduction. Many middle class taxpayers that itemize will see an income tax increase. The stats used by the sponsors show that 5% of the people will be receiving an income tax increase. That is one in twenty. Most of those increases are in the middle class and therefore those getting an income tax increase in the middle class is far higher than one is twenty. I would expect those considering moving a business to Maine would have most of their employees in the middle class and liable to have their taxes higher not lower. Think those selling a move to Maine will say anything other than the "rate" has been cut 2%? Any backlash if the potential employer does their homework and discovers the potential cut, if any, if far less than that?