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ME_TAX_LD1495-R4-20-10
EXH B TAX INCIDENCE
COMBINED INCOME & SALES TAX IMPACT TO MAINE TAXPAYERS
TAXPAYERS TAXPAYERS
WITH INCOME WITH INCOME
ALL OVER $143,103 OVER $316,958
TAXPAYERS & TAX DECREASE & TAX DECREASE
---------------------------- --------------------------- ---------------------------
TOTAL NET TAX DECREASE FOR THIS GROUP 46,273,000 (1) 37,537,000 27,956,000
(1) - MRS REPORT HAS $51.943 MILLION TAX REDUCTION, BUT THEY ALSO ESTIMATE THAT $5.7 MILLION OF TAX REFUNDS
FOR LOW INCOME TAXPAYERS WHO DO NOT FILE INCOME TAX RETURNS WILL NOT FILE TO GET REFUNDS.
(A) (B)
TAXPAYERS
WITH INCOME ALL
ALL OVER $316,958 TAXPAYERS
TAXPAYERS & TAX DECREASE EXCEPT (B)
---------------------------- --------------------------- --------------------------
THESE NUMBERS ARE ESTIMATES AS THE REPORT ONLY GAVE THE TAX DECREASE.
(A) (B)
TAXPAYERS ( C) TAX SAVINGS
WITH INCOME ALL (INCREASE)
ALL OVER $316,958 TAXPAYERS PER TAXPAYER
TAXPAYERS & TAX DECREASE EXCEPT (B) EXCLUDING (B)
---------------------------- --------------------------- -------------------------- ------------------------
NET TAX SAVINGS FROM ABOVE YEAR 2010 46,243,000 27,956,000 18,287,000 27
FROM THE "COMBINED INCIDENCE OF TAX REFORM" REPORT PREPARED BY MAINE REVENUE SERVICES (MRS)
CHANGE FROM
APRIL 2009 JANUARY 2010 4/09 TO 1/10 % CHANGE
----------------------- ----------------------- ----------------------- -------------------
INCOME TAX CUT - ALL TAXPAYERS 111,744,000 8.7% 105,051,000 9.0% (6,693,000) -6.0%
SALES TAX INCREASE ALL TAXPAYERS (57,847,000) -7.9% (53,108,000) -7.5% 4,739,000 -8.2%
----------------------- ----------------------- -----------------------
INCOME & SALES TAX CUT - ALL TAXPAYERS 53,897,000 51,943,000 (1,954,000) -3.6%
(1) - MRS ESTIMATES THAT 50% OF LOW INCOME TAXPAYERS WILL NOT FILE TO GET A $50 - $70 INCOME TAX REFUND. IN TOTAL
MRS ESTIMATES THAT $5.7 MILLION IN REFUNDS WILL NOT BE COLLECTED. THE INCOME REDUCTION IS REDUCED BY THIS AMOUNT.
EXHIBIT A2
ME_TAX_LD1495-R4-20-10
2010 TAX BILLS SUM
COMBINED INCOME, SALES & PRPOERTY TAX IMPACT TO MAINE TAXPAYERS FROM 2009 TAX LAWS
FROM THE "COMBINED INCIDENCE OF TAX REFORM" REPORT PREPARED BY MAINE REVENUE SERVICES
(A) (B)
TAXPAYERS
WITH INCOME ALL
ALL OVER $316,958 TAXPAYERS
TAXPAYERS & TAX DECREASE EXCEPT (B)
---------------------------- --------------------------- --------------------------
TOTAL TAXPAYERS 686,694 4,545 682,149
PERCENTAGE OF TOTAL 100.00% 0.66% 99.34%
NET SALES & INCOME TAX (DECREASE) - LD 1495 (51,943,000) (27,956,000) (23,987,000)
ESTIMATED INCOME TAX REFUNDS - UNCLAIMED 5,700,000 (1) 0 5,700,000
--------------------------- --------------------------- ---------------------------
ADJUSTED LD 1495 TAX CHANGE (46,243,000) (27,956,000) (18,287,000)
CALCULATION OF % OF MAINERS WITH A NET TAX DECREASE IN 2010 - FROM LD 1495 & LD 353 PASSED IN 2009
NUMBER OF PERCENTAGE
TAXPAYERS OF TOTAL
---------------------------- ---------------------------
TOTAL MAINE TAX FAMILIES ESTIMATED IN 2010 BY THE MRS 686,694 100.0%
TOTAL REPORTED WITH A TAX DECREASE PER MRS 2010 REPORT 604,977 88.1%
ADJUSTMENT TO REFLECT TAXPAYERS WHO WILL NOT FILE (1) (125,000) -18.2%
---------------------------- ----------------------------
479,977 69.9%
ADJUSTMENT TO REFLECT TAXPAYERS WITH PROPERTY TAX INCREASE (B) (60,000) -8.7%
ADJUSTMENT TO REFLECT TAXPAYERS WITH PROPERTY TAX INCREASE ( C) (50,000) -7.3%
---------------------------- ---------------------------
ADJUSTED MAINERS WITH TAX DECREASE 369,977 53.9%
==============
(1) - THE MAINE REVENUE SERVICES ESTIMATES THAT ABOUT HALF OF THE TAXPAYER'S WHO CURRENTLY DON'T
FILE AN INCOME TAX RETURN AND ARE ENTITLED TO A $50-$70 TAX REFUND WILL NOT FILE. IT IS ESTIUMATED
AT 120,000 TAXPAYERS WILL NOT FILE AND THUS WILL HAVE A NET TAX INCREASE IN TOTAL OF $5.7 MILLION.
(A) - TO HELP BALANCE THE 2010 BUDGET, LD 353 CUT THE INCOME TAX INFLATION INDEX FOR 2009. THIS CHANGE
INCREASED INCOME TAXES IN 2009 BY $10.5 MILLION. ASSUMED $9.8 MILLION IMPACT ON MAINE RESIDENTS
AND .7 MILLION ON NON RESIDENTS.
(B) - TO HELP BALANCE THE 2010 BUDGET, LD 353 CUT THE THE PROPERTY TAX CIRCUIT BREAKER REBATE
PRROGRAM BY 20%. THE ESTIMATED TAX INCREASE WAS BASED ON $43.0 MILLION COST OF 100% REBATE ESTIMATE.
(C ) - LD 353 REDUCED THE HOMESTEAD EXEMPTION FROM $13,000 TO $10,000 EFFECTIVE IN 2010.
EXAMPLES 1-4
IMPACT OF LD 1495 ON TAXPAYERS - TAXPAYERS 65 OR OLDER WITH NO ITEMIZED DEDUCTIONS
MAINE INCOME TAX - LD 1495 2,275 2,275 2,275 2,275 2,275 9,100 3.79%
--------------------- ------------------ ------------------ ------------------ ------------------ ------------------
NET INCOME TAX DECREASE (INCREASE) 12 (17) (67) (126) (164) (374)
SALES TAX (INCREASE) (2) (120) (120) (123) (126) (129) (498)
---------------------- ------------------ ------------------ ------------------ ------------------ ------------------
NET TAX DECREASE (INCREASE) (108) (137) (190) (252) (293) (872)
==========
MAINE INCOME TAX - LD 1495 1,430 1,430 1,430 1,430 1,430 5,720 2.86%
--------------------- ------------------ ------------------ ------------------ ------------------ ------------------
NET INCOME TAX DECREASE (INCREASE) 111 95 62 19 (19) 157
SALES TAX (INCREASE) (2) (117) (117) (120) (123) (126) (486)
---------------------- ------------------ ------------------ ------------------ ------------------ ------------------
NET TAX DECREASE (INCREASE) (6) (22) (58) (104) (145) (329)
==========
MAINE INCOME TAX - LD 1495 780 780 780 780 780 3,120 1.95%
--------------------- ------------------ ------------------ ------------------ ------------------ ------------------
NET INCOME TAX DECREASE (INCREASE) 61 45 12 (31) (70) (44)
SALES TAX (INCREASE) (2) (108) (108) (110) (114) (116) (448)
---------------------- ------------------ ------------------ ------------------ ------------------ ------------------
NET TAX DECREASE (INCREASE) (47) (63) (98) (145) (186) (492)
==========
MAINE INCOME TAX - LD 1495 1,438 1,438 1,438 1,438 1,438 5,752 4.11%
--------------------- ------------------ ------------------ ------------------ ------------------ ------------------
NET INCOME TAX DECREASE (INCREASE) 25 12 (17) (52) (82) (139)
SALES TAX (INCREASE) (2) (89) (89) (91) (93) (95) (368)
---------------------- ------------------ ------------------ ------------------ ------------------ ------------------
NET TAX DECREASE (INCREASE) (64) (77) (108) (145) (177) (507)
==========
MAINE INCOME TAX - LD 1495 978 978 978 978 978 3,910 3.26%
--------------------- ------------------ ------------------ ------------------ ------------------ ------------------
NET INCOME TAX DECREASE (INCREASE) 61 48 30 6 (14) 69
SALES TAX (INCREASE) (2) (85) (85) (87) (89) (91) (352)
---------------------- ------------------ ------------------ ------------------ ------------------ ------------------
NET TAX DECREASE (INCREASE) (25) (38) (58) (84) (105) (283)
==========
LD 1495 DOES NOT ADJUST FOR INFLATION UNTIL 2014, WHILE OLD LAW ADJUSTED EVERY YEAR
(1) - MAINE LAW AS OF MAY 1, 2009 WHICH HAD FULL INFLATION ADJUSTMENT FOR 2009.
ASSUMED ABOUT 2.5% INFLATION ADJUSTMENT FOR YEARS 2011, 2012 & 2013.
(2) - THE SALES TAX INCREASE IS AN ESTIMATE BY MAINE REVENUE SERVICES. THE NUMBER
FOR 2011, 2012 AND 2013 IS BASED ON THE 2010 NUMBER PLUS A YEARLY INCREASE OF 2.5%.
(A) - MAINE REVENUE SERVICES OLD LAW CALCULATION DOES NOT AGREE WITH MAY 2009 LAW, IT
REDUCES THE 2009 INFLATION ADJUSTMENT TO RAISE TAXES BY $10.5 MILLION IN FYE 2010.
EXAMPLES 1-4
EXAMPLE 1
IMPACT OF INFLATION ADJUSTMENT TO TAX BRACKETS FROM 2004 - 2009
EXAMPLE 2
IMPACT OF INFLATION ADJUSTMENT TO TAX BRACKETS FROM 2004 - 2009
EXAMPLE 3
IMPACT OF INFLATION ADJUSTMENT TO TAX BRACKETS FROM 2004 - 2009
EXAMPLE 4
IMPACT OF INFLATION ADJUSTMENT TO TAX BRACKETS FROM 2004 - 2009
MAINE INCOME TAX - LD 1495 2,425 2,425 2,425 2,425 2,425 9,700 3.73%
--------------------- -------------------- ------------------ -------------------- -------------------- ---------------------
NET INCOME TAX DECREASE (INCREASE) 232 203 152 97 40 492
SALES TAX (INCREASE) (2) (129) (129) (132) (135) (139) (535)
------------------------------------------ ------------------ -------------------- -------------------- ---------------------
NET TAX DECREASE (INCREASE) 103 74 20 (38) (99) (43)
============
MAINE INCOME TAX - LD 1495 2,025 2,025 2,025 2,025 2,025 8,100 3.38%
--------------------- -------------------- ------------------ -------------------- -------------------- ---------------------
NET INCOME TAX DECREASE (INCREASE) 207 178 127 85 48 438
SALES TAX (INCREASE) (2) (127) (127) (130) (133) (137) (527)
------------------------------------------ ------------------ -------------------- -------------------- ---------------------
NET TAX DECREASE (INCREASE) 80 51 (3) (48) (89) (89)
============
MAINE INCOME TAX - LD 1495 1,300 1,300 1,300 1,300 1,300 5,200 2.60%
--------------------- -------------------- ------------------ -------------------- -------------------- ---------------------
NET INCOME TAX DECREASE (INCREASE) 195 179 146 110 73 508
SALES TAX (INCREASE) (2) (124) (124) (127) (130) (133) (514)
------------------------------------------ ------------------ -------------------- -------------------- ---------------------
NET TAX DECREASE (INCREASE) 71 55 19 (20) (60) (6)
============
MAINE INCOME TAX - LD 1495 975 975 975 975 975 3,900 1.50%
--------------------- -------------------- ------------------ -------------------- -------------------- ---------------------
NET INCOME TAX DECREASE (INCREASE) 170 154 121 85 48 408
SALES TAX (INCREASE) (2) (119) (119) (122) (125) (128) (494)
------------------------------------------ ------------------ -------------------- -------------------- ---------------------
NET TAX DECREASE (INCREASE) 51 35 (1) (40) (80) (86)
============
LD 1495 DOES NOT ADJUST FOR INFLATION UNTIL 2014, WHILE OLD LAW ADJUSTED EVERY YEAR
(1) - MAINE LAW AS OF MAY 1, 2009 WHICH HAD FULL INFLATION ADJUSTMENT FOR 2009.
ASSUMED ABOUT 2.5% INFLATION ADJUSTMENT FOR YEARS 2011, 2012 & 2013.
(2) - THE SALES TAX INCREASE IS AN ESTIMATE BY MAINE REVENUE SERVICES. THE NUMBER
FOR 2011, 2012 AND 2013 IS BASED ON THE 2010 NUMBER PLUS A YEARLY INCREASE OF 2.5%.
(A) - MAINE REVENUE SERVICES OLD LAW CALCULATION DOES NOT AGREE WITH MAY 2009 LAW, IT
REDUCES THE 2009 INFLATION ADJUSTMENT TO RAISE TAXES BY $10.5 MILLION IN FYE 2010.
EXAMPLES 9-12
IMPACT OF LD 1495 ON TAXPAYERS - SINGLE NO CHILDREN AND NO ITEMIZED DEDUCTIONS
MAINE INCOME TAX - LD 1495 1,838 1,838 1,838 1,838 1,838 7,352 4.60%
--------------------- -------------------- ------------------ -------------------- -------------------- ---------------------
NET INCOME TAX DECREASE (INCREASE) 169 156 127 96 71 450
SALES TAX (INCREASE) (2) (92) (92) (94) (97) (100) (383)
------------------------------------------ ------------------ -------------------- -------------------- ---------------------
NET TAX DECREASE (INCREASE) 77 64 33 (1) (29) 67
============
MAINE INCOME TAX - LD 1495 1,438 1,438 1,438 1,438 1,438 5,752 4.11%
--------------------- -------------------- ------------------ -------------------- -------------------- ---------------------
NET INCOME TAX DECREASE (INCREASE) 144 131 102 71 46 350
SALES TAX (INCREASE) (2) (89) (89) (91) (93) (95) (368)
------------------------------------------ ------------------ -------------------- -------------------- ---------------------
NET TAX DECREASE (INCREASE) 55 42 11 (22) (49) (18)
============
MAINE INCOME TAX - LD 1495 1,038 1,038 1,038 1,038 1,038 4,152 3.46%
--------------------- -------------------- ------------------ -------------------- -------------------- ---------------------
NET INCOME TAX DECREASE (INCREASE) 119 106 77 46 31 260
SALES TAX (INCREASE) (2) (85) (85) (87) (89) (91) (352)
------------------------------------------ ------------------ -------------------- -------------------- ---------------------
NET TAX DECREASE (INCREASE) 34 21 (10) (43) (60) (92)
============
MAINE INCOME TAX - LD 1495 675 675 675 675 675 2,700 2.70%
--------------------- -------------------- ------------------ -------------------- -------------------- ---------------------
NET INCOME TAX DECREASE (INCREASE) 107 99 80 59 44 282
SALES TAX (INCREASE) (2) (75) (75) (77) (79) (81) (312)
------------------------------------------ ------------------ -------------------- -------------------- ---------------------
NET TAX DECREASE (INCREASE) 32 24 3 (20) (37) (30)
============
LD 1495 DOES NOT ADJUST FOR INFLATION UNTIL 2014, WHILE OLD LAW ADJUSTED EVERY YEAR
(1) - MAINE LAW AS OF MAY 1, 2009 WHICH HAD FULL INFLATION ADJUSTMENT FOR 2009.
ASSUMED ABOUT 2.5% INFLATION ADJUSTMENT FOR YEARS 2011, 2012 & 2013.
(2) - THE SALES TAX INCREASE IS AN ESTIMATE BY MAINE REVENUE SERVICES. THE NUMBER
FOR 2011, 2012 AND 2013 IS BASED ON THE 2010 NUMBER PLUS A YEARLY INCREASE OF 2.5%.
(A) - MAINE REVENUE SERVICES OLD LAW CALCULATION DOES NOT AGREE WITH MAY 2009 LAW, IT
REDUCES THE 2009 INFLATION ADJUSTMENT TO RAISE TAXES BY $10.5 MILLION IN FYE 2010.
EXAMPLES 13-16
IMPACT OF LD 1495 ON TAXPAYERS - TAXPAYERS WITH ITEMIZED DEDUCTIONS
MAINE INCOME TAX - LD 1495 12,125 12,125 12,125 12,125 12,125 48,500 6.06%
--------------------- -------------------- ------------------ -------------------- -------------------- ---------------------
NET INCOME TAX DECREASE (INCREASE) 265 236 202 168 132 738
SALES TAX (INCREASE) (2) (355) (355) (364) (373) (383) (1,475)
---------------------- -------------------- ------------------ -------------------- -------------------- ---------------------
NET TAX DECREASE (INCREASE) (90) (119) (162) (205) (251) (737)
============
MAINE INCOME TAX - LD 1495 8,250 8,250 8,250 8,250 8,250 33,000 5.50%
--------------------- -------------------- ------------------ -------------------- -------------------- ---------------------
NET MAINE INCOME TAX DECREASE (INCREASE) 315 286 252 218 182 938
FEDERAL INCOME TAX DECREASE (INCREASE) (78) (71) (63) (55) (46) (234)
SALES TAX (INCREASE) (2) (269) (269) (276) (283) (290) (1,118)
---------------------- -------------------- ------------------ -------------------- -------------------- ---------------------
NET TAX DECREASE (INCREASE) (32) (54) (87) (120) (154) (414)
============
MAINE INCOME TAX - LD 1495 6,188 6,188 6,188 6,188 6,188 24,752 6.19%
--------------------- -------------------- ------------------ -------------------- -------------------- ---------------------
NET MAINE INCOME TAX DECREASE (INCREASE) (296) (310) (326) (344) (360) (1,340)
FEDERAL INCOME TAX DECREASE (INCREASE) 75 78 82 86 90 335
SALES TAX (INCREASE) (2) (120) (120) (123) (126) (129) (498)
---------------------- -------------------- ------------------ -------------------- -------------------- ---------------------
NET TAX DECREASE (INCREASE) (342) (352) (367) (384) (399) (1,502)
============
MAINE INCOME TAX - LD 1495 4,588 4,588 4,588 4,588 4,588 18,352 5.74%
--------------------- -------------------- ------------------ -------------------- -------------------- ---------------------
NET MAINE INCOME TAX DECREASE (INCREASE) (226) (240) (256) (274) (290) (1,060)
FEDERAL INCOME TAX DECREASE (INCREASE) 57 60 64 69 73 266
SALES TAX (INCREASE) (2) (106) (106) (108) (111) (114) (439)
---------------------- -------------------- ------------------ -------------------- -------------------- ---------------------
NET TAX DECREASE (INCREASE) (276) (286) (300) (316) (331) (1,233)
============
LD 1495 DOES NOT ADJUST FOR INFLATION UNTIL 2014, WHILE OLD LAW ADJUSTED EVERY YEAR
(1) - MAINE LAW AS OF MAY 1, 2009 WHICH HAD FULL INFLATION ADJUSTMENT FOR 2009.
ASSUMED ABOUT 2.5% INFLATION ADJUSTMENT FOR YEARS 2011, 2012 & 2012.
(2) - THE SALES TAX INCREASE IS AN ESTIMATE BY MAINE REVENUE SERVICES. THE NUMBER
FOR 2011, 2012 AND 2013 IS BASED ON THE 2010 NUMBER PLUS A YEARLY INCREASE OF 2.5%.
(A) - MAINE REVENUE SERVICES OLD LAW CALCULATION DOES NOT AGREE WITH MAY 2009 LAW, IT
REDUCES THE 2009 INFLATION ADJUSTMENT TO RAISE TAXES BY $10.5 MILLION IN FYE 2010.
EXAMPLES 17-20
IMPACT OF LD 1495 ON TAXPAYERS - TAXPAYERS WITH ITEMIZED DEDUCTIONS
MAINE INCOME TAX - LD 1495 177,225 177,225 177,225 177,225 708,900 6.82%
-------------------- ------------------ -------------------- -------------------- ---------------------
NET INCOME TAX DECREASE (INCREASE) 38,838 38,804 38,771 38,734 155,147
MAINE INCOME TAX - LD 1495 67,625 67,625 67,625 67,625 270,500 6.76%
-------------------- ------------------ -------------------- -------------------- ---------------------
NET MAINE INCOME TAX DECREASE (INCREASE) 12,438 12,404 12,371 12,334 49,547
MAINE INCOME TAX - LD 1495 40,225 40,225 40,225 40,225 160,900 6.70%
-------------------- ------------------ -------------------- -------------------- ---------------------
NET MAINE INCOME TAX DECREASE (INCREASE) 5,286 5,252 5,218 5,182 20,938
MAINE INCOME TAX - LD 1495 19,675 19,675 19,675 19,675 78,700 6.56%
-------------------- ------------------ -------------------- -------------------- ---------------------
NET MAINE INCOME TAX DECREASE (INCREASE) 336 303 268 232 1,139
LD 1495 DOES NOT ADJUST FOR INFLATION UNTIL 2014, WHILE OLD LAW ADJUSTED EVERY YEAR
(1) - MAINE LAW AS OF MAY 1, 2009 WHICH HAD FULL INFLATION ADJUSTMENT FOR 2009.
ASSUMED ABOUT 2.5% INFLATION ADJUSTMENT FOR YEARS 2011, 2012 & 2012.
(2) - THE SALES TAX INCREASE IS AN ESTIMATE BY MAINE REVENUE SERVICES. THE NUMBER
FOR 2011, 2012 AND 2013 IS BASED ON THE 2010 NUMBER PLUS A YEARLY INCREASE OF 2.5%.
(A) - MAINE REVENUE SERVICES OLD LAW CALCULATION DOES NOT AGREE WITH MAY 2009 LAW, IT
REDUCES THE 2009 INFLATION ADJUSTMENT TO RAISE TAXES BY $10.5 MILLION IN FYE 2010.
NOTE: DUE TO AMT, NONE OF THE ABOVE TAXPAYERS GET A FEDERAL TAX BENEFIT FROM THE MAINE INCOME TAX DEDUCTION.
EXHIBIT B EXHIBIT B
ME_TAX_LD1495R8-14-09
COMPARISON OF LD 1495 TO 8.7% INCOME TAX CUT FOR ALL TAXPAYERS
MARRIED 1 2,600,000 50,000 177,225 216,063 (38,838) -18.0% 197,266 (18,797) 20,041
MARRIED 1 1,000,000 50,000 67,625 80,063 (12,438) -15.5% 73,098 (6,965) 5,473
MARRIED 1 600,000 40,000 40,225 45,511 (5,286) -11.6% 41,551 (3,959) 1,326
MARRIED 1 400,000 37,500 26,525 28,511 (1,986) -7.0% 26,030 (2,480) (495)
MARRIED 1 300,000 33,500 19,675 20,011 (336) -1.7% 18,270 (1,741) (1,405)
MARRIED 1 200,000 27,500 12,125 12,361 (236) -1.9% 11,285 (1,075) (840)
SINGLE 0 150,000 22,500 9,750 9,916 (166) -1.7% 9,053 (863) (697)
MARRIED 0 150,000 24,000 8,555 8,863 (308) -3.5% 8,092 (771) (463)
MARRIED 2 150,000 24,000 8,055 8,378 (323) -3.9% 7,649 (729) (406)
SINGLE 0 125,000 20,000 8,125 8,003 122 1.5% 7,307 (696) (818)
MARRIED 0 125,000 22,000 6,665 6,908 (243) -3.5% 6,307 (601) (358)
MARRIED 1 125,000 22,000 6,415 6,666 (251) -3.8% 6,086 (580) (329)
SINGLE 0 100,000 18,500 6,188 5,878 310 5.3% 5,367 (511) (821)
MARRIED 0 100,000 20,000 4,775 4,953 (178) -3.6% 4,522 (431) (253)
MARRIED 1 100,000 20,000 4,525 4,711 (186) -3.9% 4,301 (410) (224)
NOTE: WHAT THE ABOVE ILLUSTRATES IS THAT 99% OF TAXPAYERS INCLUDING SMALL BUSINESSES WOULD HAVE MORE OF A TAX BREAK IF
IF A FLAT 8.7% INCOME TAX CUT WAS PASSED VS. LD 1495. LESS THAN 1% OF SMALL BUSINESSES IN MAINE HAVE INCOME IN EXCESS OF $400,000.
ACCORDINGLY THE STATEMENT THAT LD1495 WILL BENEFIT SMALL BUSINESS IN MAINE IS NOT TRUE.
EXHIBIT C
ME_TAX_LD1495-R8-14-09
EXH C TAX RATES
COMPARISON OF TAX RATES UNDER CURRENT LAW AND LD 1495 (A)
ASSUMPTIONS:
MARRIED WITH TWO CHILDREN AND INCOME OF $275,000
STATE ITEMIZED DEDUCTIONS OF $33,000.
(1)
MAY 2009 (A) TAX (DECREASE) % INCOME TAX
MAINE LAW LD 1495 INCREASE DECREASE
----------------------- ----------------------- -------------------------- ----------------------
INCOME TAX AFTER CREDITS 18,238 17,963 (276) -1.5%
NOTE: ALL INCOME EARNED IN EXCESS OF 275,000 WILL BE TAX AT 6.85% UNDER LD 1495.
NOTE: WHAT THE ABOVE ILLUSTRATES IS THAT WHILE IT IS TRUE THAT LD 1495 REDUCES ITS TOP RATE FROM
8.5% TO 6.85%, THAT REDUCTION DOES NOT HAPPEN UNTIL VERY HIGH INCOME LEVELS. LESS THAN 2% OF MAINE
TAXPAYERS EARN MORE THAN $275,000. ALSO IT ILLUSTRATES THAT FOR THIS TAXPAYER THEIR OVERALL
EFFECTIVE TAX RATE ONLY DROPS FROM 6.63% TO 6.53%.
ASSUMPTIONS:
MARRIED WITH TWO CHILDREN AND INCOME OF $70,000
ITEMIZED DEDUCTIONS OF $16,500
INTEREST 12,250 (175,000 AT 7%)
PROPERTY TAX 3,500
EXCISE TAX 400 (1) TAX
CONTRIBUTIONS 350 MAY 2009 (A) REDUCTION % TAX
MAINE LAW LD 1495 (INCREASE) REDUCTION
----------------------- ----------------------- ---------------------- ----------------------
MAINE INCOME TAX AFTER CREDITS 2,216 2,068 148 6.7%
FEDERAL INCOME TAX INCREASE (22)
ESTIMATED SALES TAX INCREASE (138)
-----------------------
NET TAX DECREASE (INCREASE) (12)
============
THE ABOVE ILLUSTRATES THAT LD 1495 ACTUALLY TAXES ALL INCOME OVER $55,000 AT 8%, WHILE CURRENT
LAW TAXES SOME OF THIS INCOME AT 6.9% AND SOME AT 8.5%. UNDER CURRENT LAW A MARRIED COUPLE
WITH TWO CHILDREN, WHO DOES NOT ITEMIZE DEDUCTIONS PAYS TAXES AT 2% TO 7% ON THE FIRST $61,250
OF INCOME, THEN ALL INCOME OVER $61,250 IS TAX AT 8.5%.
LESS THAN 30% OF MAINE TAX FAMILIES EARN MORE THAN $59,000, SO MOST TAXPAYERS HIGHEST TAX RATE
IS ONLY 7%. THE 6.5% RATE UNDER LD 1495 IS ONLY A .5% REDUCTION NOT THE ADVERTISED 2% CUT FROM
8.5% TO 6.5%. ALSO INCOME OVER $55,000 IS TAX AT 8% UNDER LD 1495, SO THE RATE CUT ON HIGHER INCOME
IS AGAIN ONLY CUT BY .5% FROM 8.5% UNDER CURRENT LAW TO 8% UNDER LD 1495.
EXHIBITS C & D ILLUSTRATE THAT ONLY ABOUT 2% OF MAINERS AT THE TOP INCOME LEVELS ARE ACTUALLY
GETTING A RATE CUT FROM 8.5% TO 6.5%. THE 70% OF MAINERS EARNING LESS THAN $59,000 ARE GETTING
A TAX CUT FROM 7% TO 6.5% AND ALL OTHERS EXCEPT THE TOP 2% OF TAXPAYERS ARE GETTING A TAX
CUT FROM 8.5% TO 8% UNDER LD 1495.
ASSUMPTIONS:
MARRIED WITH NO CHILDREN AND INCOME OF $60,000
BOTH AGE 65 OR OLDER
NO ITEMIZED DEDUCTIONS
THE ABOVE ILLUSTRATES THAT LD 1495 ACTUALLY TAXES INCOME FROM $52,000 TO $55,000 AT 8.5%, WHILE CURRENT
LAW TAXES THIS INCOME AT 7.0% . IT ALSO SHOWS THAT INCOME FROM $55,000 TO $58,000 IS TAXED AT 10% UNDER
LD 1495 AS COMPARED TO 7% AND 8.5%.
(A)
(1) ESTIMATED MAINE FEDERAL 2010
MAINE ADJUSTED LD 1495 INCOME SALES TAX TOTAL TAX INCOME TAX TOTAL TAX
NUMBER OF ITEMIZED MAY 2009 YEAR 2010 TAX (DECREASE) % DECREASE INCREASES (DECREASE) (DECREASE) (DECREASE)
FILING STATUS CHILDREN INCOME DEDUCTIONS TAX LAW PROPOSED TAX INCREASE INCREASE LD 1495 INCREASE INCREASE INCREASE
------------------------------ ------------------- --------------------- ----------------------- --------------------- ----------------------- --------------------- --------------------- ------------------------- ------------------------- -------------------------- -------------------------
MARRIED WITH 1 2,600,000 33,500 216,063 177,225 (38,838) -18.0% 1,500 (37,338) 0 (37,338)
MARRIED WITH 1 1,000,000 33,500 80,063 67,625 (12,438) -15.5% 1,250 (11,188) 0 (11,188)
MARRIED WITH 1 600,000 40,000 45,511 40,225 (5,286) -11.6% 800 (4,486) 0 (4,486)
MARRIED WITH 1 400,000 40,000 28,511 26,525 (1,986) -7.0% 655 (1,331) 0 (1,331)
MARRIED WITH 1 300,000 40,000 20,011 19,675 (336) -1.7% 557 222 0 222
MARRIED WITH 1 200,000 30,000 12,361 12,125 (236) -1.9% 355 120 0 120
SINGLE 0 125,000 20,000 8,003 8,125 122 1.5% 145 267 (34) 233
MARRIED WITH 0 125,000 22,000 6,908 6,665 (243) -3.5% 205 (38) 61 23
MARRIED WITH 2 125,000 22,000 6,423 6,165 (258) -4.0% 210 (48) 65 16
MARRIED WITH 3 125,000 22,000 6,181 5,915 (266) -4.3% 215 (51) 67 16
MARRIED WITH 5 125,000 22,000 5,697 5,415 (282) -4.9% 217 (65) 70 6
SINGLE 0 100,000 20,000 5,878 6,188 310 5.3% 120 430 (77) 352
MARRIED WITH 0 100,000 20,000 4,953 4,775 (178) -3.6% 170 (8) 44 37
MARRIED WITH 2 100,000 20,000 4,468 4,275 (193) -4.3% 180 (13) 29 16
MARRIED WITH 3 100,000 20,000 4,226 4,025 (201) -4.8% 185 (16) 30 14
MARRIED WITH 5 100,000 20,000 3,742 3,525 (217) -5.8% 190 (27) 32 6
SINGLE 0 90,000 18,000 5,198 5,388 190 3.6% 109 299 (47) 251
MARRIED WITH 0 90,000 18,000 4,273 4,085 (188) -4.4% 150 (38) 28 (10)
MARRIED WITH 2 90,000 18,000 3,788 3,585 (203) -5.4% 165 (38) 30 (8)
MARRIED WITH 3 90,000 18,000 3,546 3,335 (211) -6.0% 170 (41) 32 (9)
SINGLE 0 80,000 17,000 4,433 4,588 155 3.5% 106 261 (39) 222
MARRIED WITH 0 80,000 17,000 3,508 3,340 (168) -4.8% 130 (38) 25 (13)
MARRIED WITH 2 80,000 17,000 3,023 2,840 (183) -6.1% 145 (38) 27 (11)
MARRIED WITH 3 80,000 17,000 2,781 2,590 (191) -6.9% 154 (37) 29 (8)
SINGLE 0 70,000 16,000 3,668 3,788 120 3.3% 103 223 (30) 193
MARRIED WITH 0 70,000 16,000 2,743 2,595 (148) -5.4% 124 (24) 22 (2)
MARRIED WITH 2 70,000 16,000 2,258 2,095 (163) -7.2% 135 (28) 24 (4)
MARRIED WITH 3 70,000 16,000 2,016 1,845 (171) -8.5% 140 (31) 26 (5)
(A) - SALES TAX NUMBERS WERE BASED ON ESTIMATES PROVIDED BY MAINE REVENUE SERVICES.
(1) - BASED ON MAY 1, 2009 MAINE LAWWITH NO INFLATION ADJUSTMENT FOR 2010.
EXHIBIT - ACTUAL 2009 RETURNS EXHIBIT 1
ME_TAX_LD1495-4-20-10
COMPARISON OF CURRENT ME TAX TO LD 1495 - 11 ACTUAL RETURNS FILED IN 2009
MARRIED 3 84,698 38,676 1,866 2,901 1,035 55.5% 140 1,175 1,197 1,220 1,243
MARRIED 3 81,383 STD DED 4,021 3,736 (285) -7.1% 140 (145) (91) (32) 29
MARRIED 2 79,148 74,228 0 2,707 2,707 > THAN 27,000% 128 2,835 2,838 2,842 2,845
MARRIED 2 64,665 STD DED 2,842 2,648 (194) -6.8% 120 (74) (19) 39 100
SINGLE (ST) 0 16,964 STD DED 411 403 (8) -1.9% 56 48 68 90 108
SINGLE 1 131,862 STD DED 9,802 8,571 (1,231) -12.6% 146 (1,085) (1,052) (1,018) (989)
HEAD OF
HOUSEHOLD 2 36,077 STD DED 939 759 (180) -19.2% 100 (80) (49) (19) 13
(A) - SALES TAX NUMBERS WERE BASED ON ESTIMATES PROVIDED BY MAINE REVENUE SERVICES.
(1) - BASED ON MAY 1, 2009 MAINE LAWWITH NO INFLATION ADJUSTMENT FOR 2010.
(ST) - SINGLE TAXPAYER CLAIMED BY PARENT, SO DOES NOT GET AN EXEMPTION DEDUCTION.
EXHIBIT 2
COMPARISON OF OLD MAINE TAX LAW TO LD 1495 - YEARS 2010-2014
MARRIED Y 0 70,000 3,108 4.44% 3,075 (33) 124 91 145 211 272 718
MARRIED Y 0 60,000 2,258 3.76% 2,275 17 120 137 191 253 293 873
MARRIED Y 0 50,000 1,525 3.05% 1,430 (95) 117 23 58 104 145 329
MARRIED Y 0 40,000 825 2.06% 780 (45) 108 64 99 145 186 493
SINGLE Y 0 35,000 1,450 4.14% 1,438 (12) 89 77 108 145 177 507
SINGLE Y 0 30,000 1,025 3.42% 978 (47) 85 38 58 84 105 285
SINGLE Y 0 25,000 676 2.70% 615 (61) 75 14 35 61 83 193
SINGLE Y 0 20,000 326 1.63% 290 (36) 66 30 41 56 67 194
MARRIED 0 70,000 3,295 4.71% 3,075 (220) 124 (96) (42) 16 77 (46)
MARRIED 1 70,000 3,053 4.36% 2,825 (228) 131 (97) (43) 15 77 (48)
MARRIED 2 70,000 2,811 4.02% 2,575 (236) 138 (98) (43) 15 76 (49)
MARRIED 0 60,000 2,445 4.08% 2,275 (170) 120 (50) 4 62 123 138
MARRIED 1 60,000 2,203 3.67% 2,025 (178) 127 (51) 3 48 89 89
MARRIED 2 60,000 1,980 3.30% 1,775 (205) 134 (71) (34) 6 47 (51)
MARRIED 0 50,000 1,679 3.36% 1,550 (129) 117 (12) 24 63 104 179
MARRIED 1 50,000 1,479 2.96% 1,300 (179) 124 (55) (19) 20 60 6
MARRIED 1 45,000 1,129 2.51% 975 (154) 119 (35) 1 40 80 86
MARRIED 1 40,000 779 1.95% 650 (129) 115 (14) 21 61 90 158
MARRIED 0 35,000 637 1.82% 575 (62) 104 42 60 80 100 282
LD 1495 DOES NOT ADJUST FOR INFLATION UNTIL 2014, WHILE OLD LAW ADJUSTED EVERY YEAR.
(1) - MAINE LAW AS OF MAY 1, 2009 WHICH HAD FULL INFLATION ADJUSTMENT FOR 2009. ASSUMED 2.5% INFLATION ADJUSTMENT FOR YEARS 2011, 2012 & 2013.
(2) - THE SALES TAX INCREASE IS AN ESTIMATE BY MAINE REVENUE SERVICES. THE SALES TAX FOR 2011-2013 IS BASED ON 2010 PLUS YEARLY 2.5% INFLATION INCREASE.
EXHIBIT 3 EXHIBIT 3
COMPARISON OF MAY 2009 MAINE TAX LAW TO LD 1495 - YEAR 2010 ONLY FOR TAXPAYERS THAT ITEMIZE DEDUCTIONS
(A)
(1) ESTIMATED MAINE FEDERAL 2010
MAINE ADJUSTED CURRENT LD 1495 INCOME SALES TAX TOTAL TAX INCOME TAX TOTAL TAX
NUMBER OF ( Y- YES) ITEMIZED MAY 2009 EFFECTIVE YEAR 2010 TAX (DECREASE) % DECREASE INCREASES (DECREASE) (DECREASE) (DECREASE)
FILING STATUS CHILDREN OVER AGE 65 INCOME DEDUCTIONS TAX LAW TAX RATE PROPOSED TAX INCREASE INCREASE LD 1495 INCREASE INCREASE INCREASE
------------------------------ ------------------- --------------------- --------------------- ----------------------- --------------------- ------------------ ----------------------- --------------------- --------------------- ------------------------- ------------------------- -------------------------- -------------------------
MARRIED WITH 1 2,600,000 50,000 216,063 8.31% 177,225 (38,838) -18.0% 1,500 (37,338) 0 (37,338)
MARRIED WITH 1 1,000,000 50,000 80,063 8.01% 67,625 (12,438) -15.5% 1,000 (11,438) 0 (11,438)
MARRIED WITH 1 600,000 40,000 45,511 7.59% 40,225 (5,286) -11.6% 750 (4,536) 0 (4,536)
MARRIED WITH 1 400,000 37,500 28,723 7.18% 26,525 (2,198) -7.7% 550 (1,648) 0 (1,648)
MARRIED WITH 1 300,000 33,500 20,563 6.85% 19,675 (888) -4.3% 450 (438) 0 (438)
MARRIED WITH 1 200,000 27,500 12,573 6.29% 12,125 (448) -3.6% 348 (100) 0 (100)
SINGLE 0 150,000 25,000 9,703 6.47% 9,750 47 0.5% 165 212 (13) 199
MARRIED WITH 1 150,000 25,000 8,536 5.69% 8,250 (286) -3.3% 255 (31) 71 41
MARRIED WITH 1 150,000 30,000 8,111 5.41% 8,125 15 0.2% 255 270 (4) 266
MARRIED WITH 1 150,000 35,000 7,686 5.12% 8,125 440 5.7% 255 695 (110) 585
MARRIED WITH 1 150,000 40,000 7,261 4.84% 8,125 865 11.9% 255 1,120 (216) 903
SINGLE 0 125,000 23,000 7,748 6.20% 8,125 377 4.9% 145 522 (106) 416
MARRIED WITH 1 125,000 23,000 6,581 5.26% 6,360 (221) -3.4% 214 (7) 55 49
MARRIED WITH 1 125,000 30,000 5,986 4.79% 6,125 140 2.3% 214 354 (35) 319
MARRIED WITH 1 125,000 35,000 5,561 4.45% 6,125 565 10.2% 214 779 (141) 637
MARRIED WITH 1 125,000 40,000 4,893 3.91% 6,125 1,232 25.2% 214 1,446 (308) 1,138
SINGLE 0 100,000 20,000 5,878 5.88% 6,188 310 5.3% 120 430 (77) 352
MARRIED WITH 1 100,000 20,000 4,711 4.71% 4,525 (186) -3.9% 170 (16) 46 31
MARRIED WITH 1 100,000 25,000 4,286 4.29% 4,250 (36) -0.8% 170 135 5 140
MARRIED WITH 1 100,000 30,000 3,861 3.86% 4,125 265 6.9% 170 435 (40) 395
MARRIED WITH 1 100,000 35,000 3,436 3.44% 4,125 690 20.1% 170 860 (103) 756
MARRIED WITH 1 100,000 40,000 3,011 3.01% 4,125 1,115 37.0% 170 1,285 (167) 1,117
SINGLE 0 80,000 18,000 4,348 5.44% 4,588 240 5.5% 106 346 (60) 286
MARRIED WITH 1 80,000 18,000 3,181 3.98% 3,035 (146) -4.6% 133 (13) 22 9
MARRIED WITH 1 80,000 25,000 2,586 3.23% 2,650 65 2.5% 133 198 (10) 188
MARRIED WITH 1 80,000 30,000 2,161 2.70% 2,375 215 9.9% 133 348 (32) 315
MARRIED WITH 1 80,000 35,000 1,736 2.17% 2,100 365 21.0% 133 498 (55) 443
SINGLE 0 70,000 17,000 3,583 5.12% 3,788 205 5.7% 103 308 (51) 256
MARRIED WITH 1 70,000 17,000 2,416 3.45% 2,290 (126) -5.2% 124 (2) 19 17
MARRIED WITH 1 70,000 23,000 1,934 2.76% 1,960 26 1.3% 124 150 (4) 146
MARRIED WITH 1 70,000 27,000 1,654 2.36% 1,740 86 5.2% 124 210 (13) 197
MARRIED WITH 1 70,000 30,000 1,311 1.87% 1,725 415 31.6% 124 539 (62) 476
SINGLE 0 60,000 15,000 2,903 4.84% 2,913 10 0.3% 100 110 (2) 107
MARRIED WITH 1 60,000 15,000 1,794 2.99% 1,600 (194) -10.8% 120 (74) 29 (45)
MARRIED WITH 1 60,000 20,000 1,444 2.41% 1,325 (119) -8.2% 120 1 18 19
MARRIED WITH 1 60,000 25,000 1,094 1.82% 1,050 (44) -4.0% 120 76 7 83
MARRIED WITH 0 Y 60,000 STD DED 2,258 3.76% 2,275 17 0.7% 115 132 0 132
MARRIED WITH 0 Y 40,000 STD DED 825 2.06% 780 (45) -5.4% 105 61 0 61
SINGLE 0 Y 35,000 STD DED 1,475 4.21% 1,438 (38) -2.5% 87 50 0 50
MARRIED WITH 1 40,000 STD DED 779 1.95% 650 (129) -16.6% 108 (21) 0 (21)
MARRIED WITH 1 45,000 STD DED 1,129 2.51% 975 (154) -13.6% 115 (39) 0 (39)
SINGLE 0 32,000 STD DED 1,314 4.10% 1,198 (116) -8.8% 85 (31) 0 (31)
MARRIED WITH 0 Y 85,000 78,000 0 0.00% 3,175 3,175 140 3,315 0 3,315
(A) - SALES TAX NUMBERS WERE BASED ON ESTIMATES BY MAINE REVENUE SERVICES.
(1) - BASED ON MAY 2009 MAINE LAW, THE 2010 INFLATION ADJUSTMENTS WERE ASSUMED TO BE ZERO.
EXHIBIT 4
ME_TAX_LD1495R8-14-09
COMPARISON OF MAINE TAX FOR RESIDENTS VS. NON RESIDENTS UNDER LD 1495 - YEAR 2010
(1) NON
ITEMIZED NUMBER MAINE NON RESIDENT
FILING DEDUCTIONS OF MAINE RESIDENT RESIDENT TAX TAX AS % OF
STATUS OR STD CHILDREN INCOME TAX LD 1495 TAX LD 1495 DIFFERENCE RESIDENT TAX
--------------- --------------------- --------------- ------------------- -------------------- -------------------- -------------------- --------------------
NON
ITEMIZED NUMBER RESIDENT NON TAX % TAX
FILING DEDUCTIONS OF MAINE OLD MAINE RESIDENT INCREASE INCREASE
STATUS OR STD CHILDREN INCOME LAW TAX (LD 1495) (DECREASE) (DECREASE)
--------------- --------------------- --------------- ------------------- --------------------- -------------------- -------------------- --------------------
(1) - LD 1495 DOES NOT ALLOW THE HOUSEHOLD CREDIT FOR NON RESIDENTS, SO TAX IS FLAT 6.5% OF
THE FIRST $250,000 AND 6.85% ON INCOME OVER $250,000.
EXHIBIT 5
ME_TAX_LD1495R4-20-10
COMPARISON OF MAINE TAX FOR 2006 VS. 2009 & IMPACT OF INFLATION ADJUSTMENTS
WHAT THE ABOUT ILLUSTRATES IS THAT MAINE'S OLD LAW WHICH INDEXED BOTH THE TAX BRACKETS AND THE
STANDARD DEDUCTION HAS A MUCH GREATER PERCENTAGE TAX REDUCTION ON LOWER INCOME LEVELS THAN
WITH HIGHER INCOME LEVELS.
IN JUNE OF 2010, IN AN EFFORT TO BALANCE THE 2010 & 2011 STATE BUDGET, THE GOVERNOR PROPOSED TO
ELIMINATE INDEXING FOR TWO YEARS. THIS CHANGE WAS ESTIMATED TO RAISE INCOME TAXES BY $45 MILLION.
THE REPUBLICANS REDUCED THE $45 MILLION DOWN TO $10.5 MILLION IN YEAR 2010. HOWEVER THE IMPACT
OF THIS TAX INCREASE ON 2009 TAX RETURNS WILL BE DISPROPORTIONATELY ASSESSED AGAINST LOWER INCOME
TAXPAYERS.
THE FOLLOWING ILLUSTRATES THE HOW THE 10.5 MILLION TAX INCREASE IMPACTS THE ABOVE TAXPAYERS
AND HOW IT WOULD BE ALLOCATED IF ALL TAXPAYERS WERE GIVEN THE SAME % INCREASE.
(1) 2009
ITEMIZED NUMBER MAINE MAINE 2009 PROPORTIONAL TAX INCREASE
FILING DEDUCTIONS OF MAINE INCOME TAX INCOME TAX TAX .7% TAX AS % OF FAIR
STATUS OR STD CHILDREN INCOME NEW 2009 OLD 2009 INCREASE INCREASE TAX INCREASE
--------------- --------------------- --------------- ------------------- -------------------- -------------------- -------------------- ------------------------ ---------------------
(1) - TO RAISE $10.5 MILLION COULD BE RAISE MORE FAIRLY BY A PROPORTIONAL .7% SURCHARGE.
($1.5 BILLION TOTAL INCOME MAINE INCOME TAX FOR 2009 TIMES .7% = $10.5 MILLION)
ANOTHER WAY TO EXPLAIN THE DISPROPORTIONAL ALLOCATION OF THE $10.5 MILLION TAX INCREASE IN 2009 IS THAT THE TOP
10% OF MAINE TAXPAYERS CURRENTLY PAY 57% OF MAINE INCOME TAXES, SO THESE TAXPAYERS SHOULD PAY ABOUT $6 MILLION
OF THE $10.5 MILLION. BUT THEY WILL ONLY PAY ABOUT $2 MILLION OR ONLY 1/3 OF THEIR FAIR SHARE.