AUGUSTA – Since his reelection, Governor LePage has been very vocal about eliminating income taxes, and now he’s starting to make moves.
While some people are strongly in favor of receiving a larger paycheck, others are afraid of the repercussions.
“It’s an opportunity to have a conversation amongst Maine voters about what’s really important to them in terms of prioritizing,” said Representative Ken Fredette.
LD 1367 aims to amend Maine’s constitution to eliminate state income taxes. If passed in the legislature, it will then go to Maine voters. There have been positive economical changes since the income tax was lowered in 2011, and Governor LePage and the bill’s sponsors hope eliminating the tax entirely would continue those improvements.
“Well I think the idea would be to implement this over time. Basically, you’ve seen over the period of the last four years that the unemployment rate continued to decline here in the state of Maine. As that unemployment rate continues to decline, spending continues to improve. Our ecomony is generally just going to grow, and so essentially what you can try to do is grow your way out of the reliance upon that income tax,” said Fredette.
Governor LePage has made it clear that he will do whatever he has to to try and eliminate the income tax. And with all five republican legislative leaders on board to cosponsor the bill, they’ve gained a slew of followers. But one main concern about passing the bill is how the government will make up for the $1.8 billion loss.
“If we want to eliminate the income tax, we could increase the sales tax to 15 percent. That would cover most of the loss of the income tax, but I think most people at that point would actually see a tax increase. Another way, of course, is cutting state spending, so to cut about $2 billion out of the state budget, which is what the elimination of the income tax would require, we could close every public school and every college campus to even try and make up that difference,” said Senator Nathan Libby.
While Senator Libby doesn’t think either option is viable to make up for the revenue loss, he is also concerned about the people that could be negatively affected.
“We’ve seen an analysis done that would actually show a fairly large tax increase on folks on the lower end of the income spectrum, while folks at the higher end would see a fairly large tax decrease,” Libby said.
Many opinions and concerns were heard during the public hearing. The people in favor are adamant about giving Maine citizens a choice rather than just taking their hard earned money, whereas others believe that tax payers are more concerned about their income than the taxes on it. A work session will be held in the coming months.