Maine voters reject tax change enacted by legislators

The June 8 ballot in Maine included this question: "Do you want to reject the new law that lowers Maine's income tax and replaces that revenue by making changes to the sales tax?" The majority of voters said "yes" so the new law will not go into effect.

An article posted on The Maine Public Broadcasting Network website (6/9/10) includes comments from some voters on their views on the measure. One concern was whether there was really a tax reduction from the combination of income tax rate reduction and broadening of the sales tax base. That is a good question. Reducing the top income tax rate sounds like a tax reduction for high income individuals. In contrast, broadening the sales tax, without a rate reduction, sounds like a tax increase for everyone with the burden heavier for low income taxpayers as the greater sales tax represents a larger percentage of their income relative to a higher income taxpayer.

Is the Maine approach the best technique for making tax law changes? Taxes are complicated and it is not easy to get the full picture of how a broad reform plan will work. Of course, that is why we elect representatives to the legislature - so they can get the information needed and propose appropriate reforms. I think it was a difficult measure for voters to consider. Perhaps town hall meetings would have worked better where details of the state's tax and spending could be explained, where weaknesses exist in the tax system based on principles of good tax policy and how various reforms would work.

What do you think?