Testimony: Common Sense Income Tax Reform
Testimony in Support of LD 1213, “An Act to Reform Income Taxes by Reducing Tax Rates for
Each of the 3 Income Tax Brackets”
Senator Grohoski, Representative Perry, and the distinguished members of the Committee on Taxation, my name is Nick Murray and I serve as director of policy for Maine Policy Institute. We are a free market think tank, a nonpartisan, non-profit organization that advocates for individual liberty and economic freedom in Maine. Thank you for the opportunity to testify on LD 1213.
We commend the sponsors for bringing forward this piece of bipartisan tax reform legislation, which would provide current and prospective Mainers a greater ability to plan and achieve their goals by telling folks that the state will be taking less of their hard-earned income.
This bill would bring basic, commonsense tax reform that Mainers not only deserve today, but sorely need. It would lower income taxes for all single filers earning less than $80,000 per year, or joint filers earning $160,000/year, but it would provide a substantially larger benefit for those on the lower side of the earnings distribution by lowering taxable income up to $23,000/year for a single filer by half.
Even though this reform proposal might seem to some on this committee as too far, keep this in mind: Maine imposes the highest tax rate on income made up to $100,000 for a single filer than any other state in New England. If this bill were to pass, it would simply bring Maine’s tax code at most incomes, especially those at the lower end of the earning spectrum, into relative parity with other states in our region.
Income taxes are truly unlike any other tax. It places a disincentive to work and create value for others. Legislators should not be surprised that our state’s workforce participation and average household income are paltry compared to the nation, due to the oppressive income tax structure we have in place. Ideally, the state would promote earnings instead of taxing them. Until then, bills like LD 1213 are no-brainers if we want to raise the standard of living for Maine people.
Tax policy is a significant part of the decision-making process for businesses and families choosing where to reside. Please deem LD 1213 “Ought To Pass” and work to build a tax policy environment that promotes growth instead of stagnation. Thank you for your time and consideration.