YARMOUTH — I didn’t see it coming, but the governor’s tax reform proposal is as well suited for collaborative bipartisan agreement as any I can imagine. The reason, ironically, is the significant tax cut it delivers to middle-income Mainers. I say ironically, because these cuts immunize the plan from the very heart of where partisan Democrats might ordinarily denounce the governor.

What I like most about the governor’s plan is the same thing I’ve liked about every major tax reform initiative of the last decade. It reweights our system toward sales taxes, which can be reasonably shared with nonresidents. We have a lot of nonresidents in Maine, sharing in at least some of our public services, and enjoying with us Maine’s communities and quality of life.

With sales taxes, a nonresident tourist spending a weekend in Maine pays a weekend’s share of Maine’s public service costs. A nonresident owner of a Maine vacation home who lives here in Maine for two months each summer pays a two-month share of our sales taxes. And a retiree who spends just under six months in Maine pays a half share.

These tax contributions to the cost of Maine’s public services make sense to me. They especially make sense in a state like ours, with so many nonresidents who spend time here.

What distinguishes the governor’s proposal from earlier versions of tax reform is not so much on the sales tax side, but rather on the income tax side. Like earlier plans, he lowers the top rate from one of the highest nationally to the mid-range of states. But he also raises significantly the amount of income that is exempt from any tax in Maine.

Specifically, the governor’s plan would exempt from Maine income taxes a total of $20,000 for single taxpayers, $40,000 for married couples and $48,000 for four-person families. These are much higher than the exempt amounts in the federal tax code.

What does this mean for a “middle-income” taxpayer? Based on census data, median household income is roughly $26,000 for a one-person household, $57,000 for a two-person household, and $73,000 for larger households. The income tax cuts are sizable for each of these illustrative taxpayers.

Under the governor’s plan, a single filer with income of $26,000, and using the standard deduction, would see his or her income tax cut from $683 to $345. A married couple with income of $57,000 would see a cut from $1,687 to $978. And a family of four with income of $73,000 would see a cut from $2,244 to $1,438.

As a frame of reference, I looked back at my analysis of L.D. 1495, the tax reform plan passed by Democrats in 2009, which I also supported. My analysis was based on the tax policy in effect at that time, but the analysis is instructive to the opportunity we have before us now.

For a single filer with income of $26,000, the Democrats’ 2009 tax reform plan cut income taxes from $852 to $740. For a married couple with income of $57,000, the tax cut was from $2,213 to $2,035. For a family of four with income of $73,000, the cut was from $3,089 to $2,815. Middle-class tax cuts, for sure, but not like those proposed by the governor in the current plan.

Whether a large income exemption like LePage proposes is good or bad public policy is a fair debate. But what it delivers to middle-income Mainers is more dramatic than any version of tax reform that has been proposed yet. By far. That makes it an unbelievably powerful starting place for bipartisan collaboration over the coming months.

Importantly, the governor’s plan goes even further for seniors.

On top of the exempt amounts offered to younger taxpayers, the plan also exempts up to $35,000 in pension or Social Security income per beneficiary. So the total amount of income that a senior can earn before taxes is $55,000 for a single filer, or $110,000 for a joint filer.

Plus their homestead exemption is doubled. Plus their maximum property tax refund rises from $900 to $1,500.

Again, it’s a fair debate whether a tax system so strongly beneficial to seniors is good or bad public policy. But as a purely descriptive point, middle- and even above-middle-income seniors are enormously well-treated under the governor’s plan.

Will everyone be paying more sales taxes? Yes, absolutely. Are there some people who pay no income taxes now, and who will have additional sales taxes to pay?

Of course there are. But they’ll be able to apply for a sales tax credit to offset those additional taxes. And for those with a high burden of property taxes, the plan raises the maximum property tax refunds, increases the refund formula and relaxes the income-eligibility restrictions.

The bottom line? There is a real opportunity for bipartisan collaboration here. I’m grateful to the governor for putting this out there.

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