Dear Fellow Democrats, I'm writing today to urge you to Vote NO on Question 1 on the upcoming June 8th primary ballot. If you haven't heard much about Question 1 yet, you will very soon. If passed, the question would repeal a historic tax reform law that Democrats were proud to enact last year. After many years of trying to fix Maine's antiquated tax system, we finally passed a bill that would rebalance Maine's tax code - asking tourists and non-Maine residents to pay a little more, reducing the income tax rate for all Maine residents, while giving an extra boost to our lowest-income working families and elderly. Best of all, we were able to make these changes without cutting essential state services. Year after year, the legislature has talked about tax reform, and countless commissions have recommended such a change. But powerful lobbying groups have always blocked it - until now. A NO vote on Question 1 will preserve the new law and lower income taxes for over 95% of all Mainers, and unlike the infamous Bush tax cuts praised by Republicans, it would do so in a way that benefits lower and middle income residents more than any other group, proportional to their income. In fact, Mainers would have benefited from this new reform law this year starting January 1 if not for the Maine Republican Party's efforts to veto the bill through the ballot referendum process. That's why I'm asking you to vote NO on Question 1 on June 8th. The new tax law has been endorsed by a diverse group that includes the progressive Maine Center for Economic Policy, AARP, all the Democratic candidates for Governor and Republican candidate Peter Mills, former Governor Angus King, countless Maine newspapers, the Maine Municipal Association, and several business groups including the Maine Chamber of Commerce. So why did Maine's tax system need to be reformed? We have known for a long time that Maine was overly reliant on our income tax compared to our sales tax, and that our income tax hit low and middle-income people at an especially high rate. We knew that the relatively high income tax rate compared with other states was making it hard to attract new businesses, and especially hard on small businesses that file as S-corps. The rate also made it more likely that many retired people who spent part of their year in Maine don't declare Maine as their residence or pay income taxes in Maine. The benefits of the new law would be: *A lower and more progressive income tax than the one we had before, reducing the top income tax rate to 6.5%, except for those earning more than $250,000 a year who will pay a rate of 6.85%. (For low and middle income Mainers, the effective tax rate will be brought much lower than 6.5% through a new household credit.) * The income tax is lowered through an expansion of the sales tax to some services and entertainment items, as well as a modest increase in the meals and lodging tax. * More reliable revenue that will improve stability and reduce painful cuts during hard times. * A series of partially refundable credits, including the Earned Income Tax Credit for low-income working Mainers and a new household tax credit and elderly credit. * The property tax relief rebate program will be added to the income tax form, ensuring more low and middle income Maine residents will take advantage of this rebate and be able to stay in their homes. * And although tourists and non-residents will be paying a bigger share, they will still get a really good deal in visiting Maine. As a tourism state, we knew it made no sense to have a sales tax that excluded services and entertainment, not to mention extremely low meals and lodging tax relative to most other tourism states. Some have expressed concern that the sales tax, overall, is regressive. But this law will continue to exclude key staples like groceries, heating fuel, and prescription drugs from the sales tax. And overall, with the expansion of the sales tax and the lowering of the income tax, the reform bill makes our entire tax system more progressive. Again, voting No on Question 1 means the low and middle-income residents - even after paying more for the sales tax expansions - will get a break. All of this was achieved without taking a penny away from social services or important state programs, like health care and education. The new law cuts taxes for Maine people by having our summer visitors share the load, not by cutting state services. And again, businesses across Maine - and especially the smallest Maine businesses - say this will be a powerful tool to create new jobs. While legislative Democrats and the Maine Chamber of Commerce don't always agree, I think their support for this law and the NO on 1 vote is powerful. But Maine Republicans are working hard to mislead Maine people on the new law. And that is no surprise. After getting a look at the official party platform Republicans approved last weekend - which includes deeply concerning and bizarre ideas like rejecting the UN Convention on the Rights of the Child and refers to climate change as a "myth" - nothing coming out of the Maine Republican Party should surprise us anymore. The Maine GOP hired paid signature gatherers to help them get the repeal on the ballot and now they are working hard to mislead Maine people on the facts. The Maine GOP is suggesting that the new law taxes services that it doesn't. They are talking about the expansion of the sales tax to some items, and not giving people the big picture about the significant net benefits of the new law for Maine residents. They are telling Maine people that they will lose the benefit of their mortgage deductions and business deductions. That is false. Even worse, Republicans are claiming that it increases taxes on the elderly and people with low incomes, when Maine Revenue Services confirms that low and middle income Mainers will get the most benefit from the new law, proportionate to their income. The Maine GOP is working so hard to prevent tax reform because they think it's good politics. Instead of solutions or new ideas, they are running an entire campaign to repeal a good law. That's why we need to Vote NO on Question 1. We are looking for help. Please help us spread the word (and the truth!) over the next several weeks, and make sure you Vote NO on Question 1 on June 8th to lower taxes for Maine citizens and grow our economy! Thanks for your time. I know this is complicated stuff, but it is important. I hope to see many of you this weekend at the convention in Lewiston! All the Best, Hannah M. Pingree Speaker of the House P.S. For lots more information on this new law, I recommend the Maine Center for Economic Policy's recent brief: http://www.mecep.org/view.asp?news=775 Also, the No on 1 website at: http://www.nohighertaxes.com/ Paid for by the Maine Democratic Party, PO Box 5258, Augusta, ME 04332. Not authorized by any candidate or candidate's committee. Christopher Rheault, Treasurer