AUGUSTA, Maine (NEWS CENTER) - There was more tax talk in Augusta on Friday. The bipartisan group of legislators known as the "Gang of Eleven" took its sweeping tax reform plan to the Legislature's Taxation Committee -- where it faced a lot of questions and some clear opposition.
That plan tries to put more of the state's tax burden on the sales tax, and less on the property tax and personal income tax. It would raise the sales tax to 6%, and expand the tax to cover just about everyt5hing consumers buy. That would include food, much of which is not taxed now. Also items like movie and theater tickets and ski passes.
It would also tax most services, such as haircuts, lawyers and labor on auto and home repairs. Supporters say there would be a special rebate program to help low income people deal with the higher taxes.
Supporters say the benefit of the sales tax hike would be a cut in property taxes for Maine residents and a big cut in the income tax. They argue that "rebalancing" of the tax burden would more fairly distribute the cost of government among all three taxes. They say the property tax carries too much of the burden now.
But opponents say the plan would be a tax increase at a time people can't afford one. Sen. Doug Thomas ()R-Ripley) questioned whether the benefits would outweigh the costs of the plan, and said the economy is still too poor for many Mainers to afford the higher sales taxes.
Committee members raised many other questions about the tax reform plan, including the impact on town and city budgets, the burden on low income people and whether the plan is "progressive" enough to put a sufficient tax burden on the wealthy. Members of the Gang of Eleven said their plan is still a "concept draft", and offered to work with members of the Taxation Committee to refine it in the days ahead.
The Committee already has multiple tax proposals to consider, including another it heard today. That one would increase the sales tax to 6%, and use the increased revenue only for local school funding and revenue sharing for towns and cities. That proposal would also have the tax revert to the current 5% when the economy recovers to a specific level.
The Legislature is facing a June 19 scheduled adjournment date - though many lawmakers question whether they will be able to get through all business, and agree on a new two year budget, by that date.