“It’s not enough to bleat,” Frary said. “If you just bleat, you’re a sheep waiting to get fleeced.”
That’s my friend John, at a TEA Party rally in Augusta, Maine, urging people to sign petitions opposing runaway taxation.
He himself ran for Congress (and lost) last election, is retired from teaching, has a way with words.
TEA stands for Taxed Enough Already, or has been since the Boston Tea Party, one of our early anti-taxation events, became the model for a national movement some months back.
Relatively amorphous now, it has legs and will be an important part of the national mix yet. Might make a difference in the coming mid-terms, that is.
Blithe Spirit 
The core of my remarks concerning a tax “reform” measure—inspired by the Rev. Sidney Smith.
LET US EXAMINE THE PRESENT AND PROPHESY THE FUTURE
Taxes upon every article which enters the mouth, or covers the back, or is placed upon the foot,
—taxes upon everything which is pleasant to see, hear, feel, smell or taste,
—taxes upon warmth, light and transportation,
—taxes on everything on the earth and in the waters under the earth,
—taxes on everything that comes from abroad or is grown at home,
— taxes on the booze that irrigates the citizen‘s liver, and the aspirin that eases his hangover,
—on the policeman’s automatic and the burglar’s tools,
— on the poor man’s beer and the rich man’s champagne,
—on the crematorium’s fuel, and the bride’s wedding dress.
—at bed or board, walking, standing or sitting, WE MUST PAY.
And after we die in taxed nursing homes our families bury us in taxed coffins and chisel our names on taxed granite.
Finally we gather in Heaven to be taxed no more. Or in hell where are livers, lungs, kidneys and toes are taxed for all eternity.
And then on to urge the assembled citizens to the sign the People’s Veto petition and pick up blank petitions of their own—-every one to try for five or ten signatures or more. And so on to the quote you read.
Thanks to the efforts of the Grange and the AFL in 1904 the Maine Constitution provides for a People’s Veto referendum over legislative acts.
A draft column explaining our opposition follows in a separate e-mail.
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WHAT’S THE PROBLEM?
A Wall Street Journal columnist was so stunned to hear that a Democratic legislature passed a bill reducing income taxes on ”the rich” that he hailed it as “a miracle.” J. Dwight a Maine investment counselor and columnist declares it a “mirage.” Charlie Webster, chairman of the state Republican Party immediately detected a scam and set in motion a people’s veto drive to abort the new tax “reform.”
Republicans have long favored an income tax cut and there is an argument to be made for broadening the sales tax to stabilize revenue. So understanding the opposition to HD 1495 requires some historical perspective.
Earlier this year the legislature cut the biennial budget some $500 million dollars in a bi-partisan effort. This was not in any sense proactive. Cuts were imposed by constitutional limits on borrowing and by the recession. It could only be accomplished with the help of a huge infusion of federal stimulus funds and by accounting wizardry. When the next budget comes around there will be no federal infusion and the bag of accounting tricks will be empty. At that point the Democratic majority will have the choice of reducing expenditures or raising the income tax and further “broadening” the sales taxes.
There is reason to doubt that they will choose the option to cut. Let us count the reasons.
In 2006 the Brookings Institution’s Report, Charting Maine’s Future, was hailed by Gov. Baldacci as the “blueprint” for the state’s future. The Report proposed to cut the state’s top rates and raise the threshold (around $19,000) at which people become liable. It proposed to find the funds for these reforms by establishing a bi-partisan Maine Government Efficiency Commission “composed of 12 independent-minded private citizens” assisted by the Office of Program Evaluation and Government Accountability (OPEGA).
The majority shows no interest in efficiency. Instead, it leaves the threshold unraised, increases sales tax revenues and eliminates income tax deductions.
The state income tax was instituted in 1969 with a marginal rate of 6% on incomes over $50,000, 5% on; those earning between $25,000 and $50,000, 4% per dollar between $10,000 and $25,000, 3% between $5,000 and $10,000, 2% between $2,000 and $5,000. The top rate was later increased to 8.5% and inflationary bracket creep brought us to the point where incomes over $19,000 pay 8.5%; the equivalent of $3,100 1969 dollars. How many voters would have approved an 8.5% income tax on $3,100 forty years ago?
Now we are promised a top rate of 6.5%, still higher than the one established in 1969. Indexation was passed some years ago to arrest the bracket creep. HD 1485 eliminates it, guaranteeing that the threshold at which people must pay the highest rate will rise and rise.
Let us grant that it is a minor miracle that the Democrats now agree that the present income rates are a drag on economic development. It would be a still greater miracle if they identified the idiots who imposed this drag on the state’s economy. May we hope that they will suddenly reform their habit of raising taxes? Now that would be a dazzling miracle indeed. Let us pray.
Enough of history and prophecy, let us examine the present consequences. Twenty percent of Maine’s households which pay no income taxes will be eligible for tax credits to offset the sales tax increases. How many will apply? The Maine Revenue Service admits it hasn’t figured out how to reach these people. I predict a nice little dividend to the state from those who don’t apply, the poorest among us.
Charitable deductions being disallowed, there will be a decline in charitable contributions.
This year’s budget cuts were achieved in party by shifting costs from the state budget to local property taxes. Now home owners have lost their property tax deductions. And they can forget the mortgage interest deductions as well. Apparently Sen. Piotti, the bill’s author, and his colleagues haven’t heard the news about increasing mortgage defaults.
Thirteen percent of taxpayers will pay more and many people have no idea if they will be among them. Many or most experts are trying to figure out how this will work for their clients. No surprise there, given the complexity of the legislation. Scores of services are to be subject to sales taxes. My favorites are ventriloquists and Maine’s five tailors. Does anyone seriously believe that the Maine Revenue Service can compile accurate estimates on the state’s take from this mess?
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The rich get richer because they are smarter. If you keep raising taxes the rich (smart) people will keep finding ways to avoid them, and if sooner or later that means they leave the state, thereby depriving the state of even MORE revenue, they will do so. Or live here 5 months and 29 days per calendar year.
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