Hey guv: stop slashing!

By LANCE TAPLEY  |  December 31, 2008

Few doubt upper-income folks can afford it. See the accompanying graph, created by sociologist Lane Kenworthy, comparing income growth for the bottom 20 percent of Americans, the middle 60 percent, and the top 1 percent. In 1979 household income for the top 1 percent averaged $325,000. By 2005 their income had increased to about $1.1 million. But for the poorest 20 percent, average income was $14,500 in 1979 and only $15,500 in 2005. For the middle 60 percent, average income rose from $42,000 to $51,000 (all figured in 2005 dollars).

As it is now, Maine’s personal income tax is not very “progressive.” It hits the wealthy at the same rate, 8.5 percent, that it taxes a married couple making only $40,000 a year. There are no higher brackets.

But what if there were? Calculations made at the Phoenix’s request by the state’s tax bureau, Maine Revenue Services, show that if the rate were increased from 8.5 to 12 percent on just income in excess of $200,000 for married couples filing jointly (with the same rate for income in excess of $100,000 for a single person), $102 million would be raised in tax year 2009 (the calendar year), with $204 million raised for 2009 and 2010 combined.

In another scenario, we could raise the new top rate to only 10 percent, but also lower the threshold to pay it, to income in excess of $80,000 for married people. Maine Revenue Services says this would bring in $86 million in 2009 — or $172 million over two tax years.

These rates could be temporary. The new tax could be called a “recession surcharge.” In any case, the hit to financially comfortable people would be lessened because they can deduct state taxes on their federal returns.

Alternative 2: Through bond issues, put people to work building a green Maine
Zandi, at Economy.com, calculates that a dollar spent on infrastructure, like building roads, stimulates $1.59 in economic activity. But with his infrastructure projects, Obama wants to lick more than the recession. With a green infrastructure, the United States will be less dependent on insecure foreign oil. And oil, a nonrenewable resource, will be inevitably more expensive. Plus, an economy that conserves energy and relies on renewable energy sources will reduce the carbon dioxide cars and factories belch into the air, shrinking our contribution to global warming. As former vice-president Al Gore wrote in November in the New York Times: “The bold steps that are needed to solve the climate crisis are exactly the same steps that ought to be taken in order to solve the economic crisis and the energy security crisis.”

Obama’s goal of creating 3 million new jobs over two years could largely be met by the Center for American Progress’s plan for a $100-billion, two-year investment in weatherizing buildings, ramping up mass transit, harnessing the wind and sun, and other green projects, which the Center says will produce 2 million jobs. Under this plan, Maine’s share would be $396 million, theoretically creating 9100 jobs. The Center is a DC think tank whose CEO, John Podesta, heads up Obama’s transition team.

< prev  1  |  2  |  3  |  4  |  5  |   next >
Related: The wrong man for hard times, Instead of cuts: guts, Baldacci, Dems raise broad-based taxes, More more >
  Topics: News Features , Barack Obama, Joseph Stiglitz, U.S. Congressional Budget Office,  More more >
| More

Most Popular
Share this entry with Delicious
  •   SUBVERSIVE SUMMER  |  June 18, 2014
    Prisons, pot festivals, and Orgonon: Here are some different views of summertime Maine — seen through my personal political lens.
  •   LEFT-RIGHT CONVERGENCE - REALLY?  |  June 06, 2014
    “Unstoppable: A Gathering on Left-Right Convergence,” sponsored by consumer advocate Ralph Nader, featured 26 prominent liberal and conservative leaders discussing issues on which they shared positions. One was the minimum wage.
  •   STATE OF POLARIZATION  |  April 30, 2014
    As the campaign season begins, leading the charge on one side is a rural- and northern-Maine-based Trickle-Down Tea Party governor who sees government’s chief role as helping the rich (which he says indirectly helps working people), while he vetoes every bill in sight directly helping the poor and the struggling middle class, including Medicaid expansion, the issue that most occupied the Legislature this year and last.
  •   MICHAEL JAMES SENT BACK TO PRISON  |  April 16, 2014
    The hearing’s topic was whether James’s “antisocial personality disorder” was enough of a mental disease to keep him from being sent to prison.
  •   LOCKING UP THE MENTALLY ILL  |  April 03, 2014
    The merger of the prison and mental-health systems continues

 See all articles by: LANCE TAPLEY