- Jun 11, 2015 | Gail Cole
After narrowly winning reelection last November, the nation’s “craziest governor” Paul LePage (R) has set about to accomplish some serious tax reform.
Last term, Maine Gov. LePage reduced individual income tax and slightly increased his state’s business tax climate ranking (per the non-partisan, conservative Tax Foundation). Shortly after reelection, he announced his intention to further cut income tax rates, flatten corporate income tax, eliminate preferences for certain industries, eliminate estate tax, limit property tax exemptions, broaden the sales tax base and increase the sales tax rate. His goal? To make his state more competitive nationally, internationally, and in New England.
Not surprisingly, reaching accord on the biennial budget is not coming easily to Maine legislators. A tentative deal was reached at the end of May but headlines screamed, “House Republicans vow to fight the agreement because it does not include income tax cuts for the next two years.” Both Republicans and Democrats are making acrimonious comments about the the other side of the aisle, fueling talk of a government shut down. The Bangor Daily News reported that if no spending plan is in place by June 30, the state will shut down nonessential government services. Gov. LePage disagrees, insisting, “A government shutdown is not necessary. Shame on Democrats for once again using it as a scare tactic.”
The most recent news out of the capitol is that “legislators are working feverishly behind closed doors on a budget deal that would include broad income tax cuts and an expansion and increase in the sales tax.” Currently under discussion:
- Keep the general sales tax rate at 5.5% (instead of dropping it to 5%, as under current law).
- Keep the meals tax at 8% (instead of reducing it to 7%, as under current law).
- Expand sales tax to admissions to facilities and events (movie theaters, amusement parks, concerts, museums, etc.).
- Expand sales tax to acting, dance, music and martial arts lessons.
- Expand sales tax to the services of bands, comedians, disc jockeys, jugglers, and ventriloquists.
House Minority Leader Ken Fredette (R-Newport) has confirmed: “All of these are things we’re talking about.” Movement forward seems more likely now that both Republicans and Democrats are in one room. Yet it remains to be seen if accord can be reached by the scheduled end of the legislative session, on June 17.
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