As people consider Governor LePage’s tax reform plan for Maine, a good place to start is by checking out the analysis from the Tax Foundation:
The LePage administration is responsible for the largest tax cut in Maine’s history, so it comes as no surprise that Maine Governor Paul LePage has emerged as the first Governor to propose serious tax reforms in 2015. LePage’s historic tax cut resulted in low-income workers pocketing a larger portion of their hard-earned cash.
Governor LePage is proposing, among other provisions, to lower the top individual and corporate income tax rates while broadening tax bases. This includes expanding the sales tax base to certain services while exempting other business inputs. The provision also includes raising the sales tax rate while providing low-income taxpayers a refund. The Governor has also proposed repealing Maine’s estate tax.
Prior to the LePage administration, Maine ranked 37th according to the Tax Foundation State Business Tax Climate Index. During his first term, the ranking improved from 37th to 33rd. If adopted by Maine’s legislature, the Governor’s proposal could push Maine to a ranking of 23rd.
Other significant findings in LePage’s Tax Reform include:
- Tax cut of $267 million per year as of fiscal year 2019 – plan fully phased in by 2021.
- Flattening the corporate income tax and cuts rates while eliminating preferences favoring specific industries and activities.
- Broadening the sales tax base and raising rates to offset income tax reductions.
- Repealing the estate tax and limiting property tax exemptions, along with the elimination of state-local revenue sharing and adjustments to existing state spending limitations.
- Utilizing a more progressive structure to cut income tax rates for all income levels – this includes additional brackets and a “bubble” bracket designed to phase out the state’s zero bracket for higher income earners.
Visit taxfoundation.org for more details.
from Aaron Chadbourne http://ift.tt/1BiSPHa