"POLITICS AND OTHER MISTAKES"
Warning label
By Al Diamon
Does your state suffer from a plague of politicians complaining about high taxes? If so, ask your spin doctor about SNOT-RX.SNOT-RX stands for the Strimling-Nass Omnibus Tax Reform and, uh, eXpansion. It's the new sedative from the laboratories of state Senators Ethan Strimling, a liberal Democrat from Portland, and Richard Nass, a conservative Republican from Acton. Because SNOT-RX contains elements from both the right and left, it works like no other miracle cure for voters tired of listening to elected officials whine about how awful things are.
Keep in mind it doesn't actually make things less awful. It just stops the whining.
SNOT-RX is not for everyone. Before taking it, make sure your finances are secure, preferably in off-shore accounts. Side effects may include nausea, high blood pressure and decisions to move to New Hampshire. Tourists should consult with their physicians before ingesting information about SNOT-RX, due to the danger of damage to the nervous system and wallet. In rare cases, patients who believe SNOT-RX has actually reduced their tax bills have also experienced strong convictions that Anna Nicole Smith's baby was fathered by Elvis.
SNOT-RX is not approved to treat high taxes. It merely shifts the burden from a group scientists refer to as some people to subjects they label other people. It's possible you qualify for both categories.
Here's how SNOT-RX works. Like those drugs that raise good cholesterol and lower bad cholesterol, this measure increases good taxes and decreases bad taxes. Unfortunately, only people who believe they've received personal invitations from Elvis to his baby's christening think there's any such thing as good taxes.
Instead, there are bad taxes and worse taxes. A bad tax would be the income tax, which discourages prosperity. A worse tax would be a levy on columnists who overuse quotation marks.
SNOT-RX lowers the income tax's top rate from 8.5 percent to 6.99 percent. Other brackets are reduced as well, so, most people would save money. Which is good because most people would also pay increased sales taxes. This proposal calls for expanding that tax to cover snacks, services and recreation, as well as higher taxes on meals, lodging and alcohol.
That would raise an additional $180 million each year (dollar amounts are based on figures supplied by Strimling). If that tax hike makes you queasy, find relief in the income-tax cut, which would offset about $130 million of it. The rest would be covered by tourists, who'd allegedly pay 28 percent of the extra sales taxes, roughly $50 million.
So, SNOT-RX is a wash.
Except it's not supposed to be. According to Strimling, his plan would produce $127 million in savings for Maine residents. Depending on how you define Maine residents.
SNOT-RX also calls for property tax relief. But that relief will only be available to those who meet stringent criteria. Such as being unusually gullible. The bill would increase the Homestead Exemption, the amount of a primary home's value that isn't subject to property taxes, from $13,000 to $50,000. For a house valued at $200,000, that's a 25-percent reduction in the tax bill.
Except it isn't. Even with an expanded sales tax, there wouldn't be enough cash to reimburse cities and towns for all they'd lose under this bigger exemption. The senators are proposing the state pay half that cost, with the rest being covered by municipalities through increased property taxes. In effect, you'd be paying yourself for your tax break. Unless your town takes advantage of a loophole in the legislation that allows it to opt out of the local share of the Homestead Exemption. In which case, you wouldn't have to pay for the tax break you wouldn't get.
That still leaves a cut of 12.5 percent on your 200-grand mansion. Minus the current $13,000 exemption. Which the state only pays half of, so it's really a $6,500 exemption. Which means you're actually getting a 9.25 percent reduction.
Unless you own a second home or business. In which case, you're getting screwed.
In order to cover costs, cities and towns would have no choice but to raise property taxes on cottages and companies. That works out for Portland - lots of businesses - and Old Orchard Beach - lots of seasonal properties - but not for towns with neither. They'd have to fall back on increasing taxes on primary homes, eliminating that tax break you just got.
There's more in the bill: an $8-million corporate tax increase, a provision allowing local sales taxes and a constitutional amendment requiring a two-thirds vote of the Legislature to raise income, sales or excise taxes (but not other taxes or fees).
Before you swallow SNOT-RX, check with a qualified professional about whether your finances are healthy enough to survive it. Or consider the possibility that Elvis is lying, and the father of that baby with the $500-million trust fund is you.
Send comments and DNA test results to me at aldiamon@herniahill.net.
