Gov. Lepage’s tax initiative is a huge giveaway to the wealthy

Gov. Lepage’s tax initiative is a huge giveaway to the wealthy

An analysis by the Maine Center for Economic Policy (MECEP) shows that the proposal to cut the state income tax to four percent, which makes up part of a ballot initiative announced yesterday by the Maine Republican Party and Governor Paul LePage, would primarily benefit Maine’s wealthiest residents.

“The Governor’s plan to reduce and eventually eliminate Maine’s income tax is a huge giveaway to the wealthy that will jeopardize funding for schools and other services vital to Maine families and businesses. Implementing a four percent flat tax by 2021 will cost nearly $600 million, roughly half of current state funding for K-12 education,” said MECEP executive director Garrett Martin in a statement.

“Mainers with annual income above $175,000 would receive almost 50 percent of the benefits from this massive tax cut. The top 1 percent of Mainers with income greater than $390,000 would get an average tax cut of over $21,000 while the 20 percent of Mainers with income less than $23,000 will get an average tax cut of just $14,” explained Martin.

“Mainers with annual income above $175,000 would receive almost 50 percent of the benefits from this massive tax cut.”

The ballot initiative also includes a mechanism to fully eliminate the income tax over a longer time-frame. If implemented, that proposal would lead to an even more unequal outcome, according to Representative Adam Goode, who chairs the legislature’s Taxation Committee.

“Eliminating the income tax would be a $60,000 tax giveaway for people who make more than $390,000 a year. How can you justify that when children are going hungry in our towns and seniors are struggling to stay in their homes?” said Goode, a Democrat representing part of Bangor. “There is no scenario where a $60,000 tax giveaway to people making nearly $400,000 per year strengthens the middle class. Voters should reject the governor’s reckless proposal that would be devastating to schools, local communities and everyday Mainers who will see big hikes in their property tax bills.”

Photo: Gov. LePage defends his tax proposals at a town hall forum in Farmington, via Andi Parkinson.

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