Maine Republican lawmakers back Gov. Paul LePage to eliminate the state income tax, which would cut state revenue by half or nearly $1.7 billion and devistate working families.
“The Governor has lost touch with reality if he thinks he can completely eliminate the state income tax without a way to pay for it," said Maine Democratic Party (MDP) Chairman Phil Bartlett. "The GOP’s proposal will line the pockets of the wealthy, while forcing massive cuts to public education, infrastructure, and public safety. Even worse, low to middle income Mainers will bear the brunt of property tax increases and our economy will have nothing to show for it.”
Maine GOP leaders have offered no plans on how to cover the loss of $1.7 billion in annual revenue for the state, which will likely be shouldered on the backs of middle-to-low income taxpayers in the form of higher property taxes, or force massive cuts to funding for public education, roads and public safety.
"Repeal of the income tax will tear a $1.7 billion hole in future budgets. Eliminating all state funding for K-12 and higher education still wouldn't generate enough savings to pay for this reckless proposal and doing so would necessitate a 40 percent increase in property taxes to maintain current spending for schools. Alternately, legislators could double our current sales tax rate and still not generate enough revenue to balance the state's budget," said MECEP Executive Director Garrett Martin.
"This proposal is nothing more than a reckless gimmick that the legislature should quickly defeat so that they can get back to the task at hand - working in a bi-partisan manner to craft a two year budget that incorporates some of the best ideas from the A Better Deal for Maine plan and the governor's original budget proposal."
The Maine GOP claims that eliminating the income tax will make Maine more competitive, drive growth and is our best shot at keeping kids in Maine. However, experts, economists and everyday Mainers strongly dissagree:
According to a new analysis by MECEP, eliminating the income tax is a huge giveaway to the wealthy: The top 1 percent of Mainers – 7,000 households with incomes greater than $392,000 – will get a $61,000 income tax cut on average and account for 26 percent of the total amount. Meanwhile, middle-income Mainers – 140,000 households with incomes between $38,000 and $60,000 – will get a $900 income tax cut on average and account for less than 8 percent of the total. Of course, the $900 income tax cut for middle-income Mainers will quickly disappear in the face of property and sales tax increases required to pay for eliminating Maine’s income tax.
According to the Center for Budget and Policy Priorities (CBPP),individuals and businesses in states without an income tax pay more in property and sales taxes than people in other states, on average. No-income-tax states have property taxes that are 8 percent to 12 percent above the national average and sales taxes 18 percent to 21 percent above the national average.
A Mainer and former business owner penned this piece “Eliminating the state income tax won’t mean economic growth,” stating: The income tax is the most fair and efficient tax system. Give me a reason to support eliminating it, because it looks to me like another Republican Party method to further enrich the wealthy at the expense of the middle class.
A Mainer who returned home to start a new business offered this advice to the GOP:We need to sweeten the deal for the young professionals and young families we sorely need. We can do it by helping on the most pressing issues facing my generation: health insurance, student loans and housing. This would be a key, short-term investment that would pay dividends for decades.
Maine Democrats are focused on ‘middle class economics’ and a comprehensive tax relief plan that will build our economy from the middle out. The Democrats’ Better Deal for Maine prioritizes tax cuts for the middle class, lowers property taxes for all Maine homeowners and invests in our schools, workers and communities.
“While Republicans want to put funding for our kids, teachers and schools on the chopping block to give tax breaks to the ultra-rich, Maine Democrats are focused on a fair tax relief plan to boost the middle class. We know that when we invest in our students, workers and better jobs, our economy will grow in a way that benefits everyone," said Bartlett.
According to anew analysis from the national non-partisan Institute on Taxation and Economic Policy (ITEP) and the Maine Center on Economic Policy, the Better Deal for Maine plan would cut taxes, on average, for the bottom 95 percent of Maine taxpayers. It would provide a larger tax break than the Governor’s plan, on average, for the bottom 80 percent of Maine taxpayers.