Letter to PPH editor, 12/24/05, Tax Cut Transfusion for GOP

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Hadley E. Smith
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Letter to PPH editor, 12/24/05, Tax Cut Transfusion for GOP

GOP could take charge by cutting income-tax rates

Author title: "Tax cut Transfusion for the GOP"

At 8.5 percent, the top individual income-tax rate in Maine has been unchanged at more than double the average top rate (3.4%) of seven competitor states in 11 states of the the northeast for almost 20 years, excluding New York, Vermont, Rhode Island and Ohio.

Particularly during the 1980s, these high rates produced state revenue growth percentages far in excess of personal-income growth and pushed up the tax-burden percentage in the 1990s to the highest in the nation for nine years running.

They also slowed job growth to half the national average, gave Maine an anti-business investment climate, drove out businesses and youth, and plunged us into the deepest and longest recession since the 1930s.

State spending caps such as those discussed recently are relatively ineffective because they are a cap on spending growth and easily can be avoided by a Democrat majority.

Moreover, the Republican focus on cutting "spending" misses the central point because it does not reduce "tax rates," which are the primary and most effective way to control spending and the only way to correct the negative investment climate.

The GOP platform and leadership should commit to cutting all income-tax rates in half.

Business tax rates can be cut in half immediately without jeopardizing adequate state revenues with individual income-tax rates cut in half gradually over five to seven years.

JIMV
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Letter to PPH editor, 12/24/05, Tax Cut Transfusion for GOP

High income tax rates serve two desirable ends for the democrats.

1. It insures citizens are not too prosperous which leads to not dependent on democrats

2. It insures a constant number of the truely poor that the dems can buy.

Lots of poor = lots of democrats. Lots of well to do = more potential republicans and independents. It is a lot harder to buy the well to do.

Now what would a democrat politician preffer? :wink:

Roger Ek
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Letter to PPH editor, 12/24/05, Tax Cut Transfusion for GOP

I rarely disagree with Hadley Smith, but must on this point he makes:

"Moreover, the Republican focus on cutting "spending" misses the central point because it does not reduce "tax rates," which are the primary and most effective way to control spending and the only way to correct the negative investment climate."

Augusta must borrow to keep its present rate of spending. If we limit their spending there will be less borrowing. In good times nationally people earn more which raises their taxes. TABOR would limit that windfall for Augusta. People would keep more of their own money.

I understand why we have a "negative investment climate" in Maine. It is why all of our paper industry has sold off its land. It is also the primary reason so much of our other industry has left Maine.

J. McKane
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Letter to PPH editor, 12/24/05, Tax Cut Transfusion for GOP

[quote="JIMV"]Lots of well to do = more potential republicans and independents. It is a lot harder to buy the well to do.

[/quote]

Along the coast we are some seeing very "well to do" Democrats moving in (although not all become residents). They hire the local Republicans (carpenters, plumbers, electricians, gardeners) to work for them.

Gary
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Letter to PPH editor, 12/24/05, Tax Cut Transfusion for GOP

I agree with the concept of reducing the income tax. Income and capital gains taxes are among the most regressive taxes imposed upon us. The Maine Public Policy Institute in conjunction with the Beacon Hill Institute developed a State Tax Analysis Modeling Program or "STAMP" that indicated a reduction in income taxes would have the greatest positive impact on job growth in Maine.

However, fair market value assessment on property for tax purposes is also one of the most unfair and destructive means of raising revenue. It assumes the property owner can proportionately adjust his income or that his income automatically increases in proportion with the fair market value. This is grossly unrealistic, and results in forcing some from their homes.

Government spending is also a problem. Taxes are a result, or symptom if you will, of spending. Without controlling spending, we cannot control taxes, as Maine's Constitution requires a balanced budget. Our legislature is rapidly running out of gimmicks to conceal our ongoing budget deficit. It is up to the citizens to do that which our legislature cannot or will not do, and TABOR is means to do it.

Hadley E. Smith
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Letter to PPH editor, 12/24/05, Tax Cut Transfusion for GOP

I supported TABOR and collected signitures in 6 towns but the democrat majority has demonstrated already that they are willing and able to sidestep spending limits by taking items off budget and by borrowing.

Ronald Reagan and George Bush won on platforms to cut tax "rates". It might work in Maine too.

Doug Thomas
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Letter to PPH editor, 12/24/05, Tax Cut Transfusion for GOP

It would seem a cut in income tax rates would cause our economy to grow and in fact increase revenues. It would follow the deepest spending cuts should only be for the first year. Then gradually over time revenue growth should allow for a combination of more rate cuts and/or increased spending.

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