ICYMI: “Tax cut plan will benefit hardworking Mainers, not DC elites”

“Tax cut plan will benefit hardworking Mainers, not DC elites”

By: Sen. Susan Collins

Read Senator Collins’ op-ed in the Portland Press Herald HERE.

"I have heard a number of conspiracy theories from pundits, political operatives and columnists about why I supported the tax cut plan that just became law. I thought that the best way to respond would be just to tell you directly.

"I supported this legislation because it will help lower-income and middle-income families keep more of their hard-earned money, boost the economy and encourage businesses, both small and large, to grow and create jobs here in Maine and around the country.

"The 72 percent of Mainers who already use the standard deduction will pay lower taxes. The law nearly doubles the standard deduction to $12,000 for single filers and $24,000 for joint filers. The child tax credit will also be doubled from $1,000 to $2,000, and with my strong support up to $1,400 of that tax credit will now be refundable, benefiting low-income families who do not owe taxes.

"A family with $24,000 in income will not pay anything to the federal government. A single mother earning $35,000 with one child will see her taxes drop by nearly 4,000 percent. Instead of paying money to Washington, she will be getting back nearly $1,100 to help her make ends meet.

"A couple in Maine with no children, earning $60,000, will see their taxes fall by more than $900. And a couple with two children earning $60,000 will get a tax cut of about $1,700 a reduction of more than 100 percent. The bottom line is that most Maine households will see their taxes lowered and have more money in their paychecks starting early next year.

"I’ve heard liberal activists and commentators in Washington counter those facts by saying 'that just isn’t much money.' I could tell you they don’t get it, but why don’t I just let them speak for themselves? One of the better Washington quotes, from Roll Call columnist Walter Shapiro, was 'good luck taking your entire family to the south of France on vacation' with a $1,000 tax cut. See? They just don’t get it. Working Mainers aren’t looking for a trip to the French Riviera — but they would like to be able to keep some of their hard-earned money to go snowmobiling in Greenville, or to the high school basketball tournament in Bangor, or to pay for an unexpected car repair.

"The original Senate bill would have eliminated the deduction for state and local taxes. An amendment that I wrote will let taxpayers deduct up to $10,000 of state and local taxes. Another amendment I wrote not only restored the deduction for high medical bills that the House bill would have eliminated, but also lowered the threshold for two years from 10 percent to 7.5 percent of income. This will help seniors and those who are struggling with unreimbursed medical costs for long-term care or expensive chronic health conditions. I also was able to help public employees like firefighters, school teachers and police officers as well as clergy and employees of nonprofits make “catch-up” contributions to their retirement accounts.

"There is so much misinformation about this bill out there it is hard to counter it all in one short column, but here are a few things the bill does not do:

• "It doesn’t cut Medicare by $25 billion (or any amount), as you might have seen claimed in TV ads. In fact, I led the effort to clearly state in law that the tax cut will not trigger automatic budget cuts to Medicare or any other programs.

• "It doesn’t tax graduate school tuition waivers, or eliminate student loan deductions, or the $250 tax credit for teachers (a provision I authored).

• "It doesn’t take away anybody’s insurance. Instead, it eliminates the penalty that people who don’t buy health insurance must pay as mandated by the Affordable Care Act — even if they cannot afford it. Eighty percent of the people who pay this penalty make less than $50,000 a year. The mandate is so unpopular that not a single Senate Democrat offered an amendment to keep it.

"How the legislation treats employers has been the subject of much debate, but the reality is that the United States cannot continue to have the highest statutory corporate tax rate in the world at 35 percent. We are losing jobs. I talked to General Dynamics, which owns Bath Iron Works in Maine; United Technology, which employs over 1,900 people at Pratt & Whitney in North Berwick; General Electric, which has a major plant in Bangor; Procter & Gamble, which employs 400 workers in Auburn; and Idexx, which is an important high-tech employer in Westbrook, about the positive difference the new law will make in their ability to create jobs in Maine.

"New Balance, with about 900 workers manufacturing sneakers in Maine, said: 'Companies like New Balance … will be able to increase investments in their facilities and be more globally competitive while remaining a U.S. company hiring U.S. workers.'

"Patrick Regan, general manager at Pratt & Whitney, wrote: 'Pratt & Whitney plans to hire thousands of people over the next several years across our U.S. operations, and this tax reform will further support our efforts to help keep the U.S. a global leader in manufacturing and technology.'

"Cianbro Corp., a major, employee-owned construction company based in Pittsfield, already employs over 1,300 people. The day Congress sent the bill to President Trump, the company announced it intends to hire an additional 300 people next year as a direct result of this new law.

"Indeed, small businesses, which are the true backbone of our economy here in Maine, will receive tax relief that enables them to create more jobs, increase paychecks and grow our economy. Curtis Picard. president of the Retail Association of Maine, recently commented about this tax reform bill, 'For Maine and its nearly 9,000 retail establishments and more than 80,000 retail jobs, this is a welcome relief for small businesses.'

"The bottom line is that the weak economic growth and stagnant wages we have seen in recent years cannot be accepted as the new normal for our country. Hardworking Americans will soon see more money in their paychecks. In the future, Americans will continue to see more benefit from this law in the form of higher wages. And when they do, Mainers are still going to prefer spending their time in Vacationland rather than 'the south of France.'"