Change for the better

Politics + other mistakes
By AL DIAMON  |  May 16, 2013

The trouble with tax reform is that almost everybody not named Warren Buffett believes it should result in their personal tax bill going down. Buffett, the billionaire CEO of Berkshire Hathaway, is one of the few human beings who seems to grasp the concept that any rational plan for tax reform is going to result in somebody paying more, billionaire CEOs being the most likely targets.

The other reasonable target is you.

Also, me.

Tax reform is supposed to make the system fairer. According to most people's definition of fairness, that means they should pay less, and somebody else — billionaires and welfare cheats, mostly — should make up the difference. Trouble is, there aren't many billionaires, so no matter how much tax reform soaks them, it won't cover tax reductions for everybody like you. Welfare cheats make up a much smaller percentage of the population than is generally supposed. Since their assets are considerably less than the billionaires, it's unlikely they can scrape up the difference.

Which brings us to reality. In Maine, a group of legislators — Republicans, Democrats, and an independent who go by the unfortunate nickname of the "Gang of 11" — have proposed a tax reform plan that, by any honest assessment, means you'll pay more. Me, too. Even so, it may not be such a lousy idea.

Let's list the good parts first. The state income tax would be cut nearly in half. The top rate, which most of us pay on most of our income, would go from almost 8 percent to 4 percent. In fact, all the rates would go to 4 percent. No question that all of us, including Warren Buffett types, would pay less. And paying would be easier, since most deductions and other tax dodges would be eliminated. Although, that means most of us would pay more. But probably not as much more as we do now.

The estate tax would vanish. If you have an estate worth more than $2 million, this is a big deal for you. Or, actually, more of a big deal for your relatives, since you'll be dead before it does anyone any good.

Property taxes would go down. The current homestead exemption of $10,000 on your primary residence would be increased to $50,000. Sweet.

Corporate taxes would be reduced. A little. But, still serious money if you happen to be a billionaire.

Poor people would get a tax credit worth as much as $1000 a year. Pocket change for Buffett, but serious dough for those considering welfare fraud to make ends meet.

And those folks will need every penny, because here comes the bad stuff.

The sales tax would increase from 5 percent to 6 percent. It would also be expanded to cover everything except health care and education. That means basic grocery items will be taxed for the first time, as will such other essentials as electricity, heating fuel, and all services, from haircuts to home repairs to legal advice. The tax would also hit all those recreational activities so beloved by tourists, from whale-watching cruises to ski tickets to water slides. Of course, you'll be paying, too, because that includes tickets to movies, concerts, and lectures by Warren Buffett.

Taxes on restaurant meals, lodging, and beer would be raised. So would excise taxes and real estate transfer taxes.

1  |  2  |   next >
| More

Most Popular
Share this entry with Delicious
  •   ALL THE WRONG CHOICES  |  July 07, 2014
    Reform is in the air. Olympia Snowe and the Portland Press Herald are calling for changes in the way we elect our leaders in order to restore public confidence, end gridlock, and reverse global warming. There’s a much better chance they’ll accomplish that last one than either of the other two.  
  •   INSIDE GAME  |  June 25, 2014
    The university system’s decision to add Demeritt to its roster at a salary of $125,000 a year generated criticism because it was done by ignoring normal hiring procedures and came at a time when the system is facing budget shortfalls, program cuts, and layoffs. Demeritt is going to have to hit a lot of three-pointers to make up for all that negative reaction.
  •   WHICH WAY DO I TURN?  |  June 18, 2014
    Bruce Poliquin has a big problem.
    LePage would prefer you withhold judgment on those actions that didn’t work out quite the way he planned. Or, possibly, didn’t plan.
  •   THE OLD SWITCHEROO  |  June 06, 2014
    Flipping one incompetent LePage minion for another might work to solve a variety of heretofore insurmountable problems.

 See all articles by: AL DIAMON