The big idea of the last week was a dramatic tax reform proposal in Maine. The idea is big and bold. Big and bold usually means a measure has no chance of passage. State legislators from both parties are not exactly profiles in courage.
The proposal would change all of the state's primary taxes. For sales taxes, the bill raises the rate from five percent to six percent. It would eliminate an estimated 200 exemptions to the sales tax. And it would expand the base to many non professional services. A broader base of course is good. But you don't usually couple that argument with a call for higher rates. This part of the measure would make the Maine tax system decidedly more regressive. The plan will provide unspecified credits to the poor to address this issue. The sales tax increases would generate more than $700 million a year in new revenue.
View David Brunori's opinion in its entirety on the taxanalysts® Blog.
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