The talk about a referendum on the recently enacted tax reform legislation has me perplexed and dismayed.

As long as any of us remember, there has been talk about lowering the income tax and improving the business climate in Maine. It is obvious that our tax structure has been a major problem because it's regressive and the revenue it generates is unpredictable.

The only way to change this is a major reform of Maine's tax code.

The recently enacted tax overhaul moves in the right direction and will provide the state's business climate with a much needed shot in the arm. In the middle of a recession and at a time when state government will be spending $500 million less than the previous two-year budget, taxes will be lowered for most Mainers and small businesses. In addition, the year-to-year revenue stream will be more predictable.

It is a significant step forward when most states are raising their tax rates to fill budget holes. The approach the Legislature took is much more sound and it will be positive for the economy.

Maine must have a lower income tax if it wants to attract and retain job-creating businesses. My company, Kennebec Technologies, is a capital-intensive precision manufacturing company. We have a national customer base and we face global competition. The reduction in the current 8.5 percent income tax rate will preserve much-needed capital.

Regionally, our high income tax makes us less competitive than similar companies in New Hampshire and Massachusetts. Nationally and globally, it puts us at a significant disadvantage, and the current economic downturn has amplified the problem.

Also, the 8.5 percent income tax rate takes effect when your income is less than $20,000. Why should middle-class working families pay higher taxes while visitors and part-time residents pay little to have experiences they can only dream of? The cost of raising a family is not discretionary.

I have followed this discussion at the Statehouse because I care about this issue. I am puzzled that many of the people who have railed about Maine's status as a high-tax state are now positioning themselves to bring down the most positive piece of tax reform in 40 years. The opposition has an Alice-in-Wonderland quality about it.

Tax reform is at the top of everyone's list of critical changes, and this legislation has been years in the making. There was nothing swift about this tax reform. In fact, it should have happened decades ago, but the inertia and resistance were too great.

At the same time, there is no free lunch. The funds to support the income-tax reduction must come from somewhere. In this case, they come from broadening and increasing sales and use taxes.

This broadening is just common sense. Currently, the sales tax comes from a very narrow base. Why should building materials and automobiles be expected to carry the burden of producing sales tax revenue for the state, as if they are not suffering in this economy?

The sales tax system desperately needs to reflect current economic reality. Think diversification: More balance means less risk and increased stability. The new law is fair, it spreads the burden and will help create a better system.

There are so many pressing issues in Maine. If there were ever a time when people should be working together to find solutions, it is now. Our disinvestment in education, transportation and other critical areas of state government must be addressed.

Improving the business climate and bringing new jobs and investment to the state are the only realistic way to provide a better future. When the tax reform package becomes law, it will become a cornerstone in the work that needs to be done to improve our economy. It is good for small business, it is good for working class Mainers and it is good for the state of Maine.

Wick Johnson is the owner of Kennebec Technologies. He was on the University of Maine System Board of Trustees and is currently on the board of the Maine State Chamber of Commerce.