Taxation Committee Hears Proposed Sales Tax Increase Legislation

imageThe Maine State Taxation Committee has been busy coming up with a state budget.

On Friday, the committee heard two bills aimed at raising sales tax.

LD 1477 would be a temporary 1% increase to help fund municipalities and public education.

State Representative for District 106, Sara Gideon, said, “As revenue increases there would be revenue to put both towards revenue sharing and the aid to education to begin with.”

But a former CPA says adjusting the sales tax, even for a short time, is not the way to go. “I’m not against funding education, but I’m just saying there are good ways to raise taxes and bad. Raising the sales tax is the worst choice of them all,” said Albert DeMillo, who is opposed to opposed to LD 1477 & 1496.

The other bill, LD 1496, was drafted by a group of 11 bipartisan legislators looking to change the structure of the tax system in the pine tree state.

“The income tax, the sales tax, the property tax – what we see in Maine is that the property tax is way out of wack,” said Gideon.

The representative said many low income Mainers are spending more than 30% of their income on property taxes. However, DeMillo says that’s not exactly true.

The former CPA said, “Low income people pay more in sales than they do in property tax. So, increasing the sales tax will actually make it worse.”

Those for the bill believe the increase in sales tax will especially help in the Summer. When many people vacation and spend money right here in Maine.

Gideon said, “Not just Maine people will be paying that increased sales tax, but people from away as well. It helps us distribute this burden of taxation a little bit better.”

Those against the bill think legislators should reconsider the sales tax increase.

DeMillo said, “The entire bill makes no sense. You don’t increase sales tax. What you should do is reduce sales tax.”

Both bills will go before the Taxation and Appropriations committees for working sessions.

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