The Red County Caucus Issues Statement on Tax Reform

 

 

Tax Reform

As Congress debates the way forward to reform the burdensome tax code, The Red County Caucus offers some common sense parameters for effective tax reform. Most can agree that this Nation is in desperate need of tax relief but the process and implementation often get lost to the web of special interests, D.C. Power brokers, and entrenched bureaucracy. The Nation can no longer afford to wait as Washington wallows in it’s stagnation and We The People demand true and effective reform now.

The business capital of the United States continues to shrink while the size of the government continues to grow. This alarming trend is unsustainable and must be reversed. History shows that our economy functions best when the free market is strengthened and the effect of government intrusion is weakened.

To that point, Tax Reform must provide relief to all taxpayers. It is important that tax cuts have a liberating effect on the economies of every tax bracket. Every hard working American must realize more of their own income in their own pocket which in turn will loosen restricted budgets energizing local economies.

A sound tax policy must encourage business investment which is the life blood of economic growth. The anti-business policies of the past administration must be rejected for a pro-growth, pro-business tax code which gives incentive for investment in both small and large business. This will create real private sector jobs.

The balance of economic power must be shifted back to the private sector. This can only be accomplished by offsetting the tax cuts with cuts to the size of government. We must shrink the size of government.

This is accomplished through cuts to discretionary spending, meaningful reductions and cuts to the federal bureaucracy. Federal procurement procedures must be audited and true reforms implemented. An effective restructure to the entitlements must be addressed, which will focus and target the truly needy by establishing common sense parameters on cost and qualification.

The government with the least amount of functions, functions best. A simplified tax code is the best solution. As those in Washington argue the whys and wherefores of true reform and government’s place in our society, it would do our representatives well to remember the old adage: Less is More.

Tax Committee Votes to Kill the Death Tax

03/11/2016 11:42 AM EST
For Immediate Release: Friday, March 11, 2016 Contact: Adrienne Bennett, Press Secretary, 207-287-2531

Majority report supports governor’s proposal to eliminate Maine’s estate tax

AUGUSTA – The Maine Legislature’s Joint Standing Committee on Taxation voted 7-6 on Thursday in favor of Governor LePage’s proposal to eliminate Maine’s estate tax.

LD 1622, sponsored by Rep. Stedman Seavey (R-Kennebunkport) and cosponsored by Sen. Earle McCormick (R-Kennebec), repeals the estate tax starting on January 1, 2017.

“I am encouraged by the Tax Committee’s vote and hope their colleagues in the House and Senate will give this proposal serious consideration,” said Governor LePage. “Maine’s death tax is killing our chances at prosperity. We now have an opportunity to eliminate the death tax as 32 other states have done and send a clear message that we want people to stay in Maine or move back from states where there is no estate tax.”

Governor LePage first called for the elimination of the estate tax as part of his January 2015 biennial budget submission, proposing to conform to the federal estate tax exemption for 2016 and eliminating the estate tax in 2017. The Legislature voted to conform with the federal estate tax exemption amount in 2016, but stopped short of eliminating it, prompting Governor LePage to introduce this stand-alone bill.

With estimated collections of $14.4 million for deaths occurring in 2016, Maine’s estate tax is no longer a significant source of revenue when compared to taxes such as the income tax, sales tax and property tax. Revenue from the tax is notoriously unreliable and difficult to predict. Just as importantly, the Office of Tax Policy estimates that Maine would only need to retain or attract 400 individuals in order to collect the same amount of tax revenue.

“Mainers with significant liquid assets only need to change their residency to escape our oppressive estate tax,” said Governor LePage. “Our business owners and farmers, who have fixed assets in Maine, are the ones that retain their residency and whose families are burdened by the estate tax.”

Liquid assets include savings, investments and other items that are not fixed within Maine are easily protected by changing residency to a non-estate tax state. Fixed assets include land, buildings and business equipment, which are difficult to transfer ownership without incurring significant legal costs.

Clark Granger, vice president of the Maine Farm Bureau, who appeared before the committee in his personal capacity, provided compelling testimony to the committee about how Maine farmers are tied to the land they own and are unable to avoid Maine’s estate tax. As a result, farm families are often hit by the estate tax as ownership transfers from one generation to the next.

In 2013, the last year of complete data, a total of 78 non-residents and 91 residents were required to pay the estate tax. The non-resident returns had a tax liability of $1.7 million. The resident returns had a total tax liability of $25.8 million.

Following the repeal of Tennessee’s inheritance tax at the beginning of 2016, Maine is one of only 18 states that have some form of estate or inheritance tax. Most of those states are located in the Northeast and Midwest.