AUGUSTA – State Rep. Josh Tardy, the House Republican leader, reported today that 85,000 Maine families will see their taxes go up under a tax reform law passed by the Legislature last week.

In a column published in today’s Kennebec Journal and Morning Sentinel, he cited figures from Maine Revenue Services (MRS) showing that the new system will inflict financial damage on unsuspecting state residents.

“It is unfortunate that after working on this plan for several years, the Democrats in the end concocted something that punishes a large segment of the population,” he wrote in the column. “Perhaps that’s why they pushed the final bill through under cover of darkness, in the waning hours of the legislative session, with no public hearing. The 33-page tome was dropped on legislators’ desks only minutes before the vote was ordered, before legislators even had time to read the summary, let alone the turgid fine print packed into the document.”

The tax bill signed into law on June 12th is entitled “An Act to Implement Tax Relief and Tax Reform.” No Republicans in the House voted for the legislation, which was championed by Democratic legislative leaders. Rep. Tardy suggested that a more appropriate title would be “An Act to Increase Taxes for 85,000 Maine Families.”

According to MRS, he wrote, “some 31,000 families will face an income tax increase.” Mainers who itemize deductions on their federal tax returns, such as mortgage interest and property tax, are most at risk. “Another 54,000 families will lose because the sales taxes they pay on a broader range of items will total more than their income tax cut,” he wrote.

The tax scheme expands Maine’s 5 percent sales tax to scores of services and activities never before taxed, affecting thousands of small companies, trades people, technicians, mechanics and countess others “who will become tax collectors for the state, with all the accounting and paperwork hassles that entails,” wrote Rep. Tardy (R-Newport). He said a heavy burden will fall on people trying to keep older cars in operation; MRS estimates it will collect $25.7 million every year in taxes on motor vehicle maintenance and repair.

MRS also expects to collect $37 million in additional taxes on meals and lodging, where the sales tax rate is going up from 7 percent to 8.5 percent. “The bill’s proponents argued that this tax would fall heavily on tourists,” he wrote, “but roughly 80 percent of restaurant customers here are Mainers.”

###