Ordinary Maine

Over the next few weeks Mainers are going to learn a lot about the State's new tax laws. There are many changes, and in the immediate future, the number of new tax collectors is going to be significant. Below is a list of items that will be newly taxed, taxed at a higher rate or subject to tax because of changes in definitions.

• The expansion of sales tax to the following services:
o Amusement, entertainment and recreational services
o Personal property services
o Installation, repair and maintenance services and
o Transportation and courier services

• The increase in tax rates on prepared food, lodging, short term auto rentals and liquor for on-premises consumption.
• New definitions of candy and soft drink.
• Applying sales tax to rental payments and lease payments
• An airport transportation fee on taxicabs and limousine operators
• Applying sales tax to residential long distance telephone service

• Additional sales tax exemptions
• Change in sales tax treatment of park model recreational vehicles
• The expansion of the motor oil premium fees to pre-packaged motor oil and
• Change in tax rates on smokeless tobacco products

Now I understand that our legislature thinks that this latest expansion of our tax base is a good thing, but the entire experience as of late reminds me a lot of my late friend and mentor, Carl Trynor. He often cautioned his friends and business associates to beware of other people counting your money. You see when other people start counting your money, they start to get ideas about how they could better use that money to accomplish their own goals. This can and often does lead to passive aggressive and subversive behavior that can ultimately lead to the untimely demise of one's business.

In many ways that is why you pay your income tax on the wherewithal to pay concept via payroll deduction. Paid out over a whole year and many pay checks, a little bit does not hurt, but left to our own devices, politicians know that lump sum payments would cause all out rebellion of the masses. Think of payroll deductions as the frog being in the pot and having the heat turned up slowly.

Over the next few months, there are going to be many people are going to be turned into tax collectors on behalf of the State of Maine because of these tax law changes. All of those people are going to incur additional expenses, and in many cases, face price increases and unhappy customers because our legislature, in its infinite wisdom, decided to lower our income tax rate and increase and expand our sales tax base. All of this sounds good, but I suspect that come tax time, when people see just how drastically the income tax procedures have changed, many people are going to be upset. Think of this entire change as the people of Maine being tossed into a boiling pot of water all at once.

It will be interesting to see how the people of Maine handle all of this change. Will the Democrats be held accountable for this legislation at the ballot box in 2010? Will Republicans find a way to capitalize on these tax woes come April? As a Civil Libertarian, I am all too eager to sit back and watch the show. I suspect that the usual characters will be all over both sides of the issue, and in the end, the people of Maine will be left worse off for poor leadership on both sides of the isle. The question that remains: will the Tax Shuffle of 2009 finally lead to real change here in Maine? Speaking only for myself, I look forward to grabbing some popcorn and watching the whole mess unfold.

Tony