To the Editor:
If you only listened to Democratic politicians and their allies, you wouldn’t know that the tax relief proposals being considered in Congress have many family-friendly, worker-friendly and small business-friendly reforms to give us bigger paychecks. While the House and Senate versions are different and a compromise between the two must still be reached, let’s consider what they are offering.
First, both bills — the one supported by Rep. Bruce Poliquin in the House and the one supported by Sen. Susan Collins in the Senate — essentially double the benefit of the standard deduction. If this reform becomes law, individuals will be able to increase from $6,000 to $12,000 the amount of money they pay zero taxes on.
Next is a reform that is important in an aging country with a declining birthrate, and one of particular importance to the future of Maine — the oldest state in America. That reform is a dramatic increase in the child tax credit. In the House bill, the child tax credit increases from $1,000 today to $1,600. The Senate version would increase it to $2,000. Collins noted that under the Senate bill, “A single mom with one child earning $35,000 would receive $1,100 back from the government, rather than owing income tax, which would certainly be helpful to her in making ends meet.”
Both the House and Senate bills also have reforms to make small businesses — the backbone of Maine’s economy — more competitive.
The House bill creates a safeguard that makes sure the top tax rate on small businesses cannot be higher than 25 percent. As Poliquin has noted, this would be the lowest rate since World War II. The Senate bill lowers rates for so-called pass-throughs, income filed on an individual return when in fact the filer is a small business. While the differences in the two bills will be resolved, both proposals represent a major improvement over the status quo for Maine’s small businesses.
One criticism of the House and Senate bills has been limiting the state and local tax, or SALT, deduction. While this deduction can lower the burden for low and middle-income earners, it also serves as a bailout for high tax states to prevent taxpayer revolt in states like California and New York.
To address the unfairness of current law, both the House and Senate tax relief bills maintain some of the SALT deduction for middle Americans, while limiting it so that it no longer finances the wealthy in high tax states. If this reform becomes law, it will have the added benefit of putting pressure on some states to ease the burden they place on their taxpayers.
Another important deduction, especially for Mainers, is the medical expense deduction. Medical costs can spiral out of control and allowing people to deduct some of the money they spend on medical care is good policy.
Upon the Senate passing its bill, Poliquin said, “My colleague Senator Collins helped to make improvements to this proposal that I strongly support and that will benefit Maine families and small businesses, such as retaining the medical expense deduction and improving the provision dealing with historic tax credits.”
This is good for the country and good for Maine, and further proof that our Republican representatives in Congress are fighting to make tax reform benefit “we the people.”
Maine Republicans appreciate the challenge of the task at hand and are working their tails off to get this done right and allow working Mainers to have bigger paychecks, while Democrats seem content to let government keep more of your money.
We still have a ways to go, but we have confidence in our state’s representatives being national leaders as this process continues. As Vice President Pence said on “The Howie Carr Show,” “Thanks to Republicans in the House and Senate, we are one step away from passing the biggest tax cut in American history.”
Maine Republican Party