This week, a so-called “Gang of Eleven” unveiled legislation in Maine that amounts to a $700 million tax hike. Americans for Tax Reform President Grover Norquist today sent a letter to the state legislature and Governor LePage urging them to reject the bill if it is not amended to be revenue neutral. LD 1496, the “Act to Modernize and Simplify the Tax Code” increases the tax burden on Mainers, which outweighs the benefits of cutting the income and corporate tax rates.

The letter, which can be read below, outlines the negative consequences of the bill and explains that voting for the bill would be a clear violation of the Pledge to oppose any and all tax hikes that many legislators made to Maine taxpayers, including Governor LePage.  

I write today in strong opposition to LD 1496, the “Gang of Eleven” tax code rewrite. Put simply, the “Act to Modernize and Simplify the Tax Code” is a massive tax increase. Contrary to claims of those advocating for the bill, raising the overall tax burden on Mainers outweighs the benefits associated with income and corporate tax cuts.

This bill expands the sales tax base to dozens of new goods and services, increases the sales tax rate by a full point, eliminates income tax deductions, and raises the cigarette tax to a rate more than double that of neighboring New Hampshire. Many of the products and services that will face higher taxes are provided by small businesses, which are disproportionately harmed by this tax hike. Tax reform must be revenue neutral. A vote in favor of this legislation, as written, is a violation of the Taxpayer Protection Pledge.

If the goal of the legislature is to reform the tax code and make the state more attractive to job creators, that goal should be accomplished without increasing the state’s overall tax burden.

Simplifying the tax code is an admirable goal, and one that state legislatures nationwide are working to accomplish. I applaud the 50 percent reduction in income taxes, elimination of the death tax, and a reduction of the corporate income tax. These efforts, considered separately, are legitimate tax reforms that would encourage economic growth, investment, and job creation, by reducing the burden of government on the backs of taxpayers.

These tax reductions, however, are outweighed by hundreds of millions of dollars of tax hikes. This bill is a $700 million tax increase. Tax increases are not tax reform.

I urge you to oppose this tax increase, and tackle true tax reform that reduces marginal rates without increasing the size of state government.

If you have any questions about ATR’s position on this issue, please contact state affairs manager Josh Culling at 202-785-0266.

Onward,

            Grover G. Norquist

            President, Americans for Tax Reform

[PDF of the Letter to the Maine Legislature and Governor Paul LePage]

Posted by Paul Blair on Friday, May 3, 2013 1:43 PM EDT

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