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Hundreds of business owners and their employees gathered at the Statehouse on Thursday, June 14, 2007, to urge legislators to opposed LD 1925, the Joint Standing Committee on Taxation’s plan to “reform” taxes in Maine. The Maine State Chamber of Commerce joined members of the “No Tax Shift” Coalition to demonstrate the impact the proposed tax reform plan would have on businesses and communities throughout the state, from hair salons and car rentals to plastic surgery and potato farms (see list of
proposed taxable services). The rally and press conference sent home a very clear message to legislators: A tax shift is not tax reform!
Leading the press conference, Maine State Chamber of Commerce President Dana Connors provided the following remarks:
“I
want to begin by welcoming so many
representatives of Maine’s business
community to the State House today. In fact,
rarely have I seen the business community so
united and organized around a legislative
issue.
Although
we may represent different interests, and we
may come from different geographic regions
of the state, we agree that a strong Maine
economy benefits everyone. We don’t
believe that the tax reform bill before the
Legislature moves the economy in the right
direction - nor does it provide meaningful
tax relief - and we are here today as one
unified group to urge the Legislature to
oppose the bill.
May
I say at the outset, please do not
misinterpret our presence here today to mean
that we don’t appreciate the thorough and
tireless work of the taxation committee –
we do. We applaud them for their effort –
it is a difficult task.
And,
it’s not that we disagree that the
personal income tax is an impediment to
economic activity – we agree
wholeheartedly that it is.
We
stand together today in opposition to the
proposal as it is set forth in LD 1925 for
the following reasons. It is extremely broad
and complex, taking months to evolve, and
confusing in its results.
LD
1925 is sweeping in its applications. The
implications of its passage can’t possibly
be measured quickly, and the unintended
consequences are too numerous to know.
The broadening of the sales tax base leaves
many unanswered questions. Reading the
legislation only seems to lead to more
questions. Who’s in? Who’s out? What is
included in this massive sales tax
expansion? Phrases in the bill such as,
“includes, but is not limited to” and
“such as” understandably raise red flags
to those of us in the business community.
The business community literally cannot
afford such ambiguity on a matter of this importance.
Its consequences are of great concern. We know from Maine Revenue Services that there are going to be thousands of working Maine families who will LOSE under this plan. And we know from experience when unfunded homestead exemptions are created, the result is substantial tax shifts to commercial property owners.
We also know from testimony of those affected in the small business community that the cost of implementation is undervalued, and the impact on the business community is understated. But, above all else, it ignores what we have been requesting throughout this session, and for the past few years, since the passage of LD 1: We need higher thresholds – a referendum or two-thirds vote, not simple majorities – to exceed spending limits.
And, it is essential in providing the assurance that any tax burden reduction plan needs to be more secure – and any tax reform package must ultimately have to bring tax relief – Anything less is a shift!
We are opposed to this package, but remain committed to working further with the Governor, the Legisalture, the taxation committee, and many others in order to develop a tax reform proposal which benefits individual taxpayers, the business community, and most importantly, our state’s economy.”
The “No Tax Shift” Coalition is comprised of more than 50 organizations, which
represent thousands of businesses across our state (see
member list). In addition to business owners and employees, several legislators attended the rally. House Republican Leader Joshua Tardy (R-Newport) spoke at the press conference, adding his voice to those calling for spending limits as part of responsible tax reform.
“I appreciate what the business community has done here – stepping up to express these concerns. My obligation today is to acknowledge those concerns,” Tardy said. “Shifting the tax burden to businesses is not good for Maine; it’s not good for our people or our business owners. It is not tax relief. It is time for real reform with a healthy dose of common sense.”
Sen. Bill Diamond (D-Cumberland) added his name to the growing list of those opposing LD 1925, saying: “While I praise the tax committee for their five months of work on this proposal, their good intentions hurt the citizens in my district. These priorities do not fit, and I can’t support this proposal.”
Sen. Diamond gave specific cases of how certain elements of this proposal would affect small businesses, citing people and their jobs. In addition to those employers mentioned by Sen. Diamond, several business owners and entrepreneurs were present to deliver their perspectives.
Jim Crane of Crane Brothers in Exeter grows potatoes for Frito Lay. He expressed concern with the snack tax and the real estate transfer tax portions of the bill, both of which would have a huge impact on his operation.
Ruth Swanson, owner of the Town & Country Salon in Unity, simply stated her case: “This tax plan will burden my profession. We need real tax relief and decreased spending.”
Ray Moss, regional vice president at Enterprise Rent-A-Car provided several examples of ways LD 1925 would adversely impact his operations and the recruitment of recent college graduates. Moss noted that Alaska is the only state taxing car rentals higher than Maine. Contrary to many perceptions, most car rentals are provided to local people who need interim transportation while their vehicle is being repaired, not to tourists. “We are going to tax someone when they are already down financially. They are facing an insurance claim from an accident, and a large car repair bill, and we are going to tax them two or three times higher than the usual five percent tax rate. Is that right?”
Dr. Jack McGill, a Bangor plastic surgeon, regarded LD 1925 as a change in profession. “LD 1925 will tax medical services as personal care services. Overnight, I went from being a medical professional to being a personal care professional.”
LD 1925 will be debated in the House and Senate. The Maine State Chamber of Commerce will be present at the Statehouse as this proposal moves through the legislative process in the waning days of the legislative session. We continue to be a leader in the tax policy arena and look forward to working with our coalition partners to craft responsible, effective legislation.
For more information, please contact Dana Connors, president of the Maine State Chamber, by calling (207) 623-4568, ext. 13, or by emailing
dana.f.connors@mainechamber.org.
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