Tax reform takes steps to turn around Gov. LePage tax cuts for 1 percent

New tax code helps working class Mainers and seniors

Editorial by Rep. Ryan Tipping, D-Orono, who is the House Chair of the Legislature’s Taxation Committee. Tipping is serving his third term in Augusta.

Well, it’s fall, and that means it’s time for the annual tradition of false Republican attacks on TV, radio and social media.

But in the end, actions speak louder than words, and I want to tell you how Democrats’ actions this year helped working class Mainers and seniors. 

Just before we adjourned for the year, lawmakers passed changes to Maine’s tax code that – on the whole – will make life better for working families and small businesses.

After last year's federal tax overhaul, we faced a significant choice. Every time the federal government changes how we pay taxes, Maine must decide how it will adapt to those changes.

 This time, that was no small task. Fully conforming to the changes made at the federal level would have meant more than a $200 million dollar tax increase on working class Mainers.

 The 2017 federal tax shift that was passed by Bruce Poliquin and Donald Trump mostly benefited the very wealthiest people and the most powerful corporations. In my view, making that same mistake here in Maine was not an option.

Maine Democrats knew we couldn’t allow that massive tax shift onto working people. And we had to make sure the benefits of our law went to working and middle-class families and seniors on fixed incomes - not out-of-state big business or special interests. 

Our state can’t afford to give away another windfall to CEOs instead of investing in working people and new jobs. 

So Democrats rejected that lopsided approach and instead fought to make sure changes to Maine law made working people our top priority.

We nearly doubled one of our best property tax relief tools, the Property Tax Fairness Credit. That means the elderly and low-income families will have more money in their pockets when it comes time to fill the oil tank or pay for their medication.

We created a new child and dependent credit to give parents and caretakers of dependents just a little more help making ends meet.

And we put in place a new credit for employers with paid family leave policies, encouraging companies to invest in their employees and helping to make sure people can afford to be there for their loved ones when they need it the most.

These are changes that will help young families work and raise children right here in Maine. They put more money into our local economy and make Maine a more attractive place to run a business.

The tax package we passed isn’t perfect, but it is a bipartisan effort to make life better for struggling Mainers who were left behind by Donald Trump, Bruce Poliquin and the Republican Congress. 

The fight for tax fairness in our state is far from over. As Democrats, we are more committed than ever to a fair tax code that gives every Mainer the best chance to succeed.

MORE ABOUT THE TAX LAW:

The Maine law, enacted with bipartisan support, represents a compromise between legislative Republicans, who backed Gov. Paul LePage’s plan to replicate President Trump and Congressional Republicans’ tax cuts for the wealthy and profitable businesses, and Democrats, who proposed policies to benefit low- and middle-income families.

The compromise contains elements of the Trump tax plan, but it rejects the worst policies proposed in Gov. Paul LePage’s tax conformity bill — including expanded tax breaks for Maine’s wealthiest estates, loopholes for businesses that make out-of-state investments, and giveaways to the state’s largest profitable corporations. At the same time, it expands the Property Tax Fairness Credit — a vital, income-based property tax relief program for Maine homeowners and renters.

The final legislation costs $26.8 million this budget cycle — less than either the governor’s or the Democrats’ initial offerings — thereby preserving more public resources for investments in Maine’s people and communities.. 

The following quote is attributable to MECEP Executive Director Garrett Martin:

“In the fact of tremendous pressure to simply revise the state tax code to reflect the lopsided rewrite of federal tax law, Maine’s legislators opted to chart their own course. They rejected the worst policies handed down by Congress and proposed by the governor. And while the bill still contains some unnecessary and ineffective tax breaks for profitable businesses, the inclusion of an expanded Property Tax Fairness Credit will make a real difference for some of the low- and moderate-income Mainers left behind by the Trump tax cut.

“While the bill is imperfect, MECEP applauds lawmakers for asserting Maine’s authority to make its own decisions about taxes, rather than simply accepting policies handed down by Congress whether they work for Mainers or not. The Legislature also provided a meaningful lesson to future elected officials: No tax policy decision is a fait accompli. Maine always has a choice, and we should do whatever we can to ensure Maine’s tax code works for the communities and families of our state.”