Change for the better

By AL DIAMON  |  May 16, 2013

And yes, Zumba classes would be taxed.

Also, newspapers.

I figure I'll use up all my tax savings and more on just the increased cost of beer. The only way to make my personal budget balance will be to give up water slides and Warren Buffett lectures and take up welfare fraud.

Still, the Gang of 11's plan is a sensible approach. While we can quibble about the details (I don't think beer should be taxed at all), the essential points address some serious issues. Which are:

The current sales tax is too narrow. It relies heavily on people buying cars and home-improvement stuff. It allows tourists to enjoy Maine without contributing much to state coffers.

The current income tax is too high. Even with the tax cut passed last legislative session, it's a drag on the economy. This plan shifts from taxing income to taxing consumption (you've got tuberculosis, so your disease tax will be $45), which makes sense to every economist with an IQ higher than my dog. (Uh oh, pet grooming is on the list of newly taxable items.)

The state budget isn't going to get balanced unless many of these ideas are incorporated in a compromise deal that can cover the $880 million shortfall and avoid cutting $200 million in revenue sharing to municipalities.

The Gang of 11 claims tourists and rich people will pick up most of the tab for the additional $700 million in revenue this plan will produce. That's nonsense. You and I are going to pay more. Probably not a lot more. But more.

Because that's what tax reform is really about. It's 10 percent fairness and 90 percent generating cash. Too bad the G-11 refuses to admit that, avoiding this inconvenient truth like there was a tax on it. ^

The plan includes a sales tax on email service, but if you can afford it, send me comments at aldiamon@herniahill.net.

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