Portland Press Herald / Maine Sunday Telegram
COLUMN Tax law a tipping point for Maine
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CHARLES LAWTON June 14, 2009

Politics consists in choosing between

the disastrous and the unpalatable.

– John Kenneth Galbraith

State Rep. John Piotti deserves a medal, or at least an enthusiastic "Attaboy!" from all Mainers concerned about the direction of our economy.

The House majority leader – aptly hailing from Unity – has succeeded where too many of his predecessors have failed. He successfully shepherded a tax reform bill through both houses of the Legislature, and Gov. John Baldacci signed his revised version of it into law on Friday.

It's not that he has radically changed our tax system – the law is modest at best in the changes it makes.

What's notable, rather, is that it embodies that rare achievement in matters of taxation – a step in the right direction.

Type "tax" into the subject line of the Legislature's bill search site and scan the titles of the 123 resulting hits. On the whole, tax legislation reflects the "death by a thousand cuts" approach to torture – thousands of tiny exemptions, deductions, exceptions, additions, subtractions.

Each is small enough in itself; each serves some seemingly good cause; each passes or fails based on the legislative skills of its backers, with little consideration of overall impact.

The result? Our tax "system" is the unintended consequence of an accumulation of relatively insignificant changes, each with a strong band of supporters and little or no direct opposition.

It's no wonder, then, that in answer to the three basic questions of a tax system: Is it fair? Is it stable? Is it simple? We have had to answer all three with a resounding "No!"

No, it has not been fair. Some people and businesses have paid a huge share of our burden (think auto dealers and building supply stores who collect one-third of our sales taxes) while others got off scot-free (think service providers, the vast bulk of our business sector).

No, it has not been stable. When the stock market, home prices and auto rebates exploded, tax revenues exceeded forecasts. When the bubble burst and the cycle turned downward – as it invariably does from time to time – these once rapidly growing sources of tax revenue dried up, and government had to scramble to cut programs in a desperate attempt to balance the budget.

No, it has not been simple – at least for those who have to pay. For those who don't, of course, it's been very simple, and this majority naturally lined up in opposition to any change that would make them contribute. "Not now, it's a recession." "Not now, people are out of work; they can't pay." "Not now, that would be a tax increase, and we can't increase taxes."

What is most commendable about Piotti's achievement is that it combined all three elements necessary for successful change in public policy – strong and consistent commitment to clear, simple principles (fairness, stability, simplicity); open, bipartisan negotiation; and effective public outreach.

Previous efforts at tax reform – largely worked out behind closed doors – may have been principled and sometimes bipartisan, but they foundered when brought to the light of day because there was no natural constituency to support them, and there had been no campaign to develop broad public support.

Piotti and his plan's supporters took their bill to Rotary clubs and chambers of commerce and public forums across the state. They held hearings and solicited comments. More importantly, they listened to those comments and worked diligently to incorporate them into the text of their bill.

This public outreach, rather than the exact nature of the bill's provisions, is what really sets this effort apart.

Will this modest reform solve Maine's budgetary crisis? No. Will it jump-start our economy? No.

But will it mark a tipping point? Clearly, yes.

It...


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