An echo from The Portland Phoenix ~ Governor LePage's regressive tax plan
Maine doesn't have many people, fewer still, as the birth rate is flat.
PORTLAND, ME, Yet, Governor LePage insists on giving the wealthy people who live in the state (many of them for about 7-8 months of the year) tax cuts. Instead, he could use the state's surplus revenues to improve Maine's infrastructure, the educational systems and job training necessary to attract young people to the state.
Governor Paul LePage tax plan misuses revenue to give wealthy Mainers a tax break.
Maine economic study report~an echo published in The Portland Phoenix, by Francis Flisiuk
Maine Center for Economic Policy (MCEP) released an analysis on Gov. LePage’s tax bill, which confirmed that the people who stand to benefit the most from the $111 million tax cut are the state’s highest earners.
Much like the federal Tax Cuts and Job Act, which President Trump signed into law in December, Maine’s closely mirrored version — the Conformity and Family Tax Relief Act — focuses tax breaks on wealthy families and profitable businesses, benefiting from marketing that it will provide relief that every Mainer will greatly benefit from.
According to the MECEP, the plan “offers little to low and moderate-income Mainers” while undermining funding for education, health care, and infrastructure.
The LePage tax bill "would deliver tax cuts to filers who don’t need them and who are already reaping significant benefits from recent federal tax changes," writes Sarah Austin, a policy analyst at MECEP in the report.
Maine Center for Economic Policy (MCEP) released an analysis on Gov. LePage’s tax bill, which confirmed that the people who stand to benefit the most from the $111 million tax cut are the state’s highest earners.
Much like the federal Tax Cuts and Job Act, which President Trump signed into law in December, Maine’s closely mirrored version — the Conformity and Family Tax Relief Act — focuses tax breaks on wealthy families and profitable businesses, benefiting from marketing that it will provide relief that every Mainer will greatly benefit from.
According to the MECEP, the plan “offers little to low and moderate-income Mainers” while undermining funding for education, health care, and infrastructure.
The LePage tax bill "would deliver tax cuts to filers who don’t need them and who are already reaping significant benefits from recent federal tax changes," writes Sarah Austin, a policy analyst at MECEP in the report.
"Perhaps more importantly, the governor’s proposal would significantly deplete available public resources, jeopardizing the state’s ability to meet critical needs in education, health care, infrastructure, and other priorities identified by legislators and Maine voters."
The policy brief reveals that the tax bill would open the door for some profitable businesses to avoid paying income taxes altogether, reward profitable corporations with an $18 million tax break for investments made outside of Maine, and give the top one percent an average tax break of $557, compared with just $1 for the bottom one-fifth of Maine households.
Alec Porteous, Commissioner of the State Department of Administrative and Financial Services, wrote in the Legislative Proposal Statement released on March 1, "(i)n 2019, the new law will result in a federal tax cut of approximately $1 billion for our state according to the Institute on Taxation and Economic Policy. Of that $1 billion, more than $500 million would come in the form of tax relief to Maine individual income tax filers, with nearly $200 million more going to pass-through entities in our state — primarily Maine small businesses."
LePage aims to pay for the tax break with projected revenue surpluses and corporate assets.
The policy brief reveals that the tax bill would open the door for some profitable businesses to avoid paying income taxes altogether, reward profitable corporations with an $18 million tax break for investments made outside of Maine, and give the top one percent an average tax break of $557, compared with just $1 for the bottom one-fifth of Maine households.
Alec Porteous, Commissioner of the State Department of Administrative and Financial Services, wrote in the Legislative Proposal Statement released on March 1, "(i)n 2019, the new law will result in a federal tax cut of approximately $1 billion for our state according to the Institute on Taxation and Economic Policy. Of that $1 billion, more than $500 million would come in the form of tax relief to Maine individual income tax filers, with nearly $200 million more going to pass-through entities in our state — primarily Maine small businesses."
LePage aims to pay for the tax break with projected revenue surpluses and corporate assets.
Critics say the money could be put to better use.
“The governor is doubling down on failed tax breaks for profitable businesses and millionaires,” wrote MECP executive director Garrett Martin in a press release. “These tax breaks don't create jobs or boost the economy. They simply divert public resources away from the public needs to pad profits for corporations, pass-through entities and millionaires — the same special interests who are already reaping hundreds of millions of dollars in tax breaks from the Trump Tax Plan.”
In a statement to the Phoenix, Speaker of the House Sara Gideon (D-Freeport) said that the Legislature should carefully scrutinize any tax proposal that could jeopardize Maine’s recovery from the great recession or the working families they strive to lift up.
“Over these past seven years, the Legislature has purposefully and carefully created a tax structure designed to provide and maximize financial benefit to working families,” said Gideon. “There is no requirement for Maine to automatically conform with any proposal from the federal government, especially if will affect our ability to strengthen our economy and our communities. Democrats will support a tax conformity package that will grow and strengthen the middle class, that will make education and training more affordable, and that encourages businesses to start up and create jobs right here in Maine.”
The tax bill would also double the estate tax exemption threshold — which shields inherited wealth from taxation — from $11.2 million per family to $22.4 million. According to the Center on Budget and Policy Priorities, 20 estates in Maine pass on enough wealth to owe the Maine estate tax, and under LePage’s tax plan they would be able to pass on an additional $11.2 million untaxed, costing Maine $4.5 million a year.
“Tax breaks that disproportionately benefit high-income earners and profitable businesses are only one side of the coin,” reads the conclusion of the study. “The other is an erasure of future revenue that makes it harder to meet the needs of all Maine’s residents.”
The Legislature’s Taxation Committee is examining the tax cut proposal.
“The governor is doubling down on failed tax breaks for profitable businesses and millionaires,” wrote MECP executive director Garrett Martin in a press release. “These tax breaks don't create jobs or boost the economy. They simply divert public resources away from the public needs to pad profits for corporations, pass-through entities and millionaires — the same special interests who are already reaping hundreds of millions of dollars in tax breaks from the Trump Tax Plan.”
In a statement to the Phoenix, Speaker of the House Sara Gideon (D-Freeport) said that the Legislature should carefully scrutinize any tax proposal that could jeopardize Maine’s recovery from the great recession or the working families they strive to lift up.
“Over these past seven years, the Legislature has purposefully and carefully created a tax structure designed to provide and maximize financial benefit to working families,” said Gideon. “There is no requirement for Maine to automatically conform with any proposal from the federal government, especially if will affect our ability to strengthen our economy and our communities. Democrats will support a tax conformity package that will grow and strengthen the middle class, that will make education and training more affordable, and that encourages businesses to start up and create jobs right here in Maine.”
The tax bill would also double the estate tax exemption threshold — which shields inherited wealth from taxation — from $11.2 million per family to $22.4 million. According to the Center on Budget and Policy Priorities, 20 estates in Maine pass on enough wealth to owe the Maine estate tax, and under LePage’s tax plan they would be able to pass on an additional $11.2 million untaxed, costing Maine $4.5 million a year.
“Tax breaks that disproportionately benefit high-income earners and profitable businesses are only one side of the coin,” reads the conclusion of the study. “The other is an erasure of future revenue that makes it harder to meet the needs of all Maine’s residents.”
The Legislature’s Taxation Committee is examining the tax cut proposal.
Governor Paul LePage is preventing Maine from being prosperous by rewarding the wealthy, while the middle class will bear the burden of paying for health care, social service and infrastructure needs.
posted by Juliana L'Heureux | 2:14 PM
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