By: Albert A. DiMillo Jr.

Albert A. DiMillo Jr. — Mon, 14 Sep 2009 11:42:02 +0000

Your statements about the impact of the new law on Maine tax are not correct. In your first example above, you state that a single taxpayer with $45,000 of income that has $2,000 in donations and $10,000 in mortgage interest will have a reduction in Maine income tax and be better off than under the old law. This is not true. Your example does not give the other itemized deductions for this taxpayer, so I have assumed that he will have property taxes of $2,800 and excise tax of $200. Accordingly, this taxpayer has Maine itemized deductions of $15,000. Under the old law this taxpayer’s income tax would be $1,642 and under the new law his income tax increases to $1,788 or a $146 increase in year 2010. In addition, this taxpayer will see a sales tax increase of $95 so his year 2010 tax increase under the new law is $241.

With regard to your second example, once again your statement that this taxpayer will not be hurt because she will benefit from the lower tax rate is false. Assuming that this taxpayer is single and has $20,000 in other itemized deductions and has $800,000 in income each year, her Maine tax under the new law will be $15,033 greater than the old law the first year and will be more than $22,500 a year more for the next four years. Her total Maine income tax increase for the five years under the new law vs. the old law is over $105,000.

I am a retired CPA with over 30 years tax experience and have spend over 200 hours reviewing this new tax law and it is clear that the new law hurts taxpayers with significant charitable contributions. Whether that will have an impact on giving is unknown, but please stop giving out false information on the new tax law. If organizations want to know the truth about this new tax law they can go to http://www.mainedemocratstaxreform.org.

Comments on: Maine Tax Reform & Charitable Giving

By: Albert A. DiMillo Jr.