Letter: Economy calls for policy that helps business, people (Sept. 26, 2008)



Editor:

    I appreciate that Brian Durham took the time to respond to my Sept. 5 column about Maine’s tax burden. In that column, I advocate for policies that increase the average income, lower capital gains and income tax rates, and broaden the sales tax base in order to stabilize Maine’s tax system, encourage investment and reduce our tax burden.

    Mr. Durham suggests that the only meaningful way government can put money back in people’s pockets is to step aside and let business do the job. That suggestion seems ironic against the backdrop of Wall Street crumbling and business behemoths calling for taxpayer-funded lifelines – consequences of the Bush administration’s ill-conceived directive to the federal government to take a hands-off approach up until now. Given his party’s economic blunders, Mr. Durham’s accusation that Democrats are to blame for Maine’s economic woes falls flat.

   Helping business succeed is an important function of state government, but it is far from the only way to help people succeed. Reforming our archaic tax structure helps business and people alike, especially in our state of small business owners. Every reputable economic analysis urges the reduction of capital gains and income tax rates in order to foster investment. Lower rates reward prosperity, while higher rates essentially punish people and businesses that do well.

   Secondly, given that tourism is Maine’s top industry, broadening the sales tax base so that more of the things tourists buy are taxed, instead of things only Maine people buy,  (like automobiles and building supplies as is currently the case), would export a significant portion of our tax burden.  Exporting our tax burden to out-of-state tourists would benefit Maine people directly in the long run. Mainers would shoulder less of the overall sales tax burden and pay less income tax, leaving more money in their pockets at the end of the year.

    Finally, in order for bills to become law, they need to pass in both the Maine House and Senate, and then be signed by the Governor. In the last legislative session, the Maine House passed a comprehensive tax reform bill that was enthusiastically supported by well-respected Republicans Peter Mills and Karl Turner. Ultimately the bill failed in the Senate.

   It failed because of partisan stalemate, because a handful of legislators refused or feared to reach across the aisle and chose instead to honor their party affiliation before their obligation to help Maine people.

    We can continue talking about all the ways government fails us, blaming one party or the other and stalling on important reforms; or we can unleash the innovative spirit in the halls of the state house and work together under our common purpose to improve the lives of Maine people.

Rep. Cynthia Dill

House District 121





 

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