Rep. Lawrence Bliss (D-South Portland) has submitted
a comprehensive tax reform package to the State Legislature, which
convened for the new legislative term this month. The bill, which has
not yet received a bill number, will be sent to the Taxation Committee
for action some time during the first year of this two-year term.

    Bliss has argued in the past that we should not
“snip around the edges of tax reform” by just trying to change one part
of the tax system or another. “We must look at the whole system if we
are going to provide real relief. This proposal makes changes to all
three main taxes (income, property and sales tax) to provide
substantial assistance to middle and low-income Maine citizens.”

    Highlights of the proposal include: removing over
50,000 households from owing any income tax; increasing to $30,800 the
amount that can be earned by a family of four with no taxes; raising
the minimum benefit in the Tax and Rent Program to $3,000; reducing
income taxes for all taxpayers; stabilizing state revenues through a
broader tax base, and exporting a larger share of the tax burden to
non-residents and fully reimbursing municipalities for the $13,000
homestead exemption enacted in LD 1.

    Some taxes will be increased in this plan. For
example, meals and lodging tax will increase from 7 to 8 percent, the
same as New Hampshire.

    The sales tax base will be broadly expanded to
include amusement and recreational services, personal services, real
property services, taxi, same-day courier services, snack foods,
telephone directory advertising and packaging materials.

    A new excise tax is imposed on soft drinks at the
wholesale level, and the taxes are increased slightly on beer and wine,
and on auto rentals.

    “The real question,” said Bliss, “is whether people
are willing to accept some small new taxes to lower their property and
income taxes. I believe that they are, and that this plan makes a great
deal of sense for everyone.”