LePage’s Income Tax Constitutional Amendment Bill LD 1367 Offered in Committee

Posted on May 7, 2015. Filed under: Uncategorized | Tags: , , , , , |

freHouse Minority Leader Ken Fredette (R-Newport) spoke before the 127th Legislature’s Taxation Committee this week regarding Governor Paul LePage’s bill LD 1367, “RESOLUTION, Proposing an Amendment to the Constitution of Maine To Eliminate the Income Tax” (photos).

From Democratic press release:

    Top Democrats on the Taxation Committee are raising strong concerns about the Governor’s proposed Constitutional amendment to abolish the income tax by 2020 ahead of today’s hearing on the bill.

    “We are going to be raising strong concerns during the hearing. The Governor’s bill is reckless and unpaid for. It provides huge tax breaks to the wealthy at the expense of the rest us,” said Rep. Adam Goode, D-Bangor, House Chair of the Taxation Committee. “Working families will see increasing property taxes, while investment in our students and workers will be gutted. It is terrible recipe for our economy.”

    According to the Legislature’s Office of Fiscal and Program Review, the proposal would cost $1.7 billion per year. It would force cuts in K-12 and higher education, with the majority of the benefit going to those with incomes greater than $392,000. Maine spends close to $1.2 billion on K-12 and higher education and $750 million on health care for children, seniors, and people with disabilities. Even if the governor cut all state funding for education and half the funding for health care, there still wouldn’t be enough money to cover the cost of eliminating Maine’s income tax.

    According to an analysis from the Maine Center for Economic analysis, 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, while property taxes and sales taxes rise.

    “Eliminating the income tax may sound great at first glance. But doing so would be reckless to both our state budget and local town budgets everywhere. It would force severe cuts like closing down every public school and college campus in Maine or raising the sales tax to 15 percent,” said Democratic State Senator Nate Libby of Lewiston, who serves on the Taxation Committee. “This is more of a political sound bite than a serious proposal.”

Here is video along with questions from committee members.

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