Tuesday, April 20, 2010

Impact of Tax Reform Income Tax Deductions

Last week I posted comments on the upcoming People's Veto of a so-called tax reform package passed by the Democrats (and one Republican) during the last legislative session.  I gave my interpretation of how taxes will actually increase for most people in spite of the Democrats' claim the reform is "revenue neutral" and because of the change in the income tax structure, they say most will pay fewer taxes.

(Since the purpose of taxation is to get revenue, why is it necessary to "reform" a structure and keep it revenue neutral?  Of course.  There is no need.  What we do need is a reform that will lower taxes for everyone.)

If you want to review what I said, you can find it here.

As most of you know, the forum As Maine Goes is one place I like to read and much of that post came from it.  Rep. Jon McKane had posted a list of new taxes if the repeal fails.

Monday, Rep. McKane was back quoting an accountant who gives a rather interesting explanation of the tax credits the Dems included when they eliminated all deductions.  It is a very confusing scenario but one you should read because all those credits stop very early as income increases.

Because it's proprietory information, I'm not going to copy it here, but I do invite you view the explanation on the AMG forum.  Go to this place and scroll down to the second J. McKane's post (#72) on the page.

Revenue neutral?  Sure!  Vote YES on question one on the June 8th ballot.


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