May 29, 2013

Maine Democrats: Suspend $400 million tax cuts

Democrats say balancing the budget with cuts alone is irresponsible, but LePage vows to veto any bill that rolls back those tax breaks.

By Michael Shepherd mshepherd@mainetoday.com
State House Bureau

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click image to enlarge

At a news conference Wednesday, May 29, 2013, House Speaker Mark Eves, D-North Berwick, left, and Senate President Justin Alfond, D-Portland, address the media at the Maine State House on the state's budget and possibly delaying a massive tax.

Tim Greenway / Staff Photographer

On balance, he said, LePage's tax cuts and proposed elimination of revenue-sharing are a shift in taxes from the wealthy to all property taxpayers. "That's all it is!" Jackson yelled.

LePage's income tax cuts aren't only for the rich. They did cut the rate for the top earners from 8.5 percent to 7.95 percent, but they also moved 70,000 of Maine's lowest-income people from a 2 percent rate to zero.

On balance, Maine's income tax became more progressive, according to Maine Revenue Services, meaning the rich shoulder a larger percentage of the state's tax burden.

Little mentioned Wednesday were other proposals to solve Maine's budget problems.

A tax-reform proposal by the so-called Gang of 11, for instance, would create a flat, 4 percent income tax rate, broaden the sales tax to almost all goods and services and provide property tax relief.

However, the plan looks unlikely to pass. Eves and House Minority Leader Kenneth Fredette, R-Newport, said Friday they oppose it.

Many Republicans like the income tax cuts in the proposal but note that it would raise $160 million more in annual tax revenue than the state now takes in.

LePage has said that if the plan were revenue-neutral, he could support it. Many Democrats say the tax changes in the plan, particularly the flat income tax and the sales-tax adjustments, are regressive.

Assistant Senate Minority Leader Roger Katz, R-Augusta, a leader of the Gang of 11, said he's confident that the Appropriations committee can craft a "moderate, intelligent compromise" on the budget by the end of June.

"My personal hope is that the impasse where we find ourselves creates an opening for the real kind of tax reform that some of us have been advocating for," he said.

Michael Shepherd can be contacted at 370-7652 or at:


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