Governor LePage Seeks to Abolish State Income Tax
Click Here See a news video highlight of the Governor’s recent Town Hall meeting at UMPI
By: David Deschesne
Fort Fairfield Journal, April 1, 2015
PRESQUE ISLE, Maine—Maine governor, Paul LePage was in Presque Isle on March 19, conducting a town hall meeting at the University of Maine to help explain his proposed budget. The cornerstone of the Governor's budget is his tax proposal, which modernizes Maine's tax code by lowering top individual and corporate income tax rates with the goal of ultimately eliminating the State income tax.
“Mainers are overtaxed and I want to remove that tax. I am trying to eliminate the income tax,” said LePage. “The income tax is $1.2 billion of personal income tax and another $300 million from corporate income tax. I'm not trying to eliminate corporate tax but I am trying to make it competitive. We are not competitive in New England and we're not competitive in America.”
The Governor also proposed to eliminate the income tax on military retirements as a way to entice those retirees to the State to begin their second career.
“The anticipation of getting out of Iraq and Afghanistan is going to force the federal government to downsize its military. There are going to be a lot of people retiring. We want to be positioned to get the 39 to 45 year olds who are retiring to come to Maine to start their second career in Maine, with the comfort that they're not going to be facing an income tax because that's why they go to Pennsylvania, South Carolina, or Florida and other parts of the country. It's very important that we attract these younger people to Maine.”
Also on the chopping block is Maine's estate, or “death” tax which taxes small business owners on their property after they die.
The LePage budget proposal also amends or adjusts the sales tax base to some services while offering credits for low income Mainers.
“The income tax is paid for by 1.3 million people - the taxpayers of the State of Maine. The sales tax last year, we set a record with nearly 33 million tourists - they pay sales tax when they're here. So what we're doing is broadening it and they're going to pay more sales tax.”
The revenue sharing and Homestead Exemption program with the municipalities will see some major reductions while homeowners who are over 65 and on fixed income will retain their property tax credit. “The town managers will tell you, 'Our poor town, or poor city, we're going to be facing higher taxes.' I argue, 'You're worried about the town, I'm worried about the people who live in the town. They're paying too much tax when you add them all together.’”
“For those on fixed incomes, we are going to increase the homestead exemption and what is known today as revenue sharing is going to be rolled over into a bucket called the Property Fairness Tax Credit for those who are poor and elderly who own their homes. So that those on fixed incomes will never see their property tax go up. As they will no longer be paying income tax, their property tax is going to be held.”
A sales tax on junk food was also discussed earlier in the day with leaders in the grocery business. Governor LePage stressed the importance of eating healthy foods and how that is not emphasized enough in Maine.
The Governor fielded questions from the audience on energy and revenue sharing. He then elaborated on how out of control school budgets are adversely impacting communities especially with a top-heavy slate of superintendents who are allowed to “double dip.” “Superintendents are big winners. In fact, there's a couple of them that retired on a Friday, they get a $125,000 retirement and they go back to work on Monday and get a $125,000 salary off you, the taxpayer. They double their salary over the weekend. I think that's wrong.”
Maine currently spends $15,000 per student per year while Florida, with nearly three times as many students does it for between $10,000 and $11,000 while Utah spends less than $10,000. LePage said the average cost to administer a school district in America is 2% of the school's budget. In Maine, he pointed out Maine is number 1, with the highest administration costs at 5% of the school's annual budget.
For an 11 minute highlight video of the LePage town hall meeting at UMPI click here.
