The new Augusta fails to recognize that shared prosperity depends on a strong middle class. Partly as a result, Maine’s economic growth dropped from average in 2010 to weakest in the nation in 2011.
Like a suicidal airline pilot, the TABOR-like tax ratchet called L.D. 849 would throw Maine further into an economic nose dive. Poised for enactment next week, LD 849 runs up the credit card, thumbs its nose at Maine voters’ repeated rejections of tax ratchets, and robs the middle to give to the top.
By cutting income taxes gradually in half, without paying, LD 849 would shift costs to towns and schools.* These costs, shifted to property taxes, will further squeeze Maine’s middle class.
Once LD 849’s ratchet is fully implemented, here is how the cost shift of over $600 million per year will likely affect your taxes in today’s dollars.
By comparison, a person making $750,000 a year — average for the top 1% in Maine — pays just 10 cents on the dollar. Bring that to just 11 cents, and voila! You have $50 million more to invest in our state and its future.
These numbers, based on my earlier post on tax fairness, were verified in writing today by the Governor’s staff at Maine Revenue Services.