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The Billion Dollar Question: Will You Support Eliminating the State Income Tax?

April 21, 2015

For Immediate Release: Tuesday, April 21, 2015
Contact: Adrienne Bennett, Press Secretary, 207-287-2531

AUGUSTA – On Monday, Governor Paul R. LePage sent a letter to all members of Legislative leadership requesting bipartisan support for a bill to amend the Maine Constitution effectively eliminating the State income tax by 2020. LR 1983, “Proposing an Amendment to the Constitution of Maine to Eliminate the Income Tax,” would put over one billion dollars a year back into the paychecks of hard-working Maine taxpayers.

“To ensure that any income tax cut is permanent and cannot be reinstated by future legislatures, it is critical that we change the Constitution,” Governor LePage wrote in the letter. “We must remove the burden that the personal income tax places on Maine families – from retirees on fixed incomes to job creators – by amending the Constitution of the State of Maine to eliminate the personal income tax levied by our State once and for all.”

Governor LePage introduced his two-year budget on January 9, which proposes gradually lowering the income tax burden by 2019 for hundreds of thousands of working Mainers while at the same time right-sizing government.

“As I have travelled around our state these last few months talking to Mainers in town halls, addressing business and civic organizations and speaking at many other forums, it has become clear to me that the people who elected us agree that the path to prosperity for Maine is a future with no State income tax. After all, the true power comes from the people of Maine, and every elected official works on their behalf,” the Governor wrote.

Governor LePage has requested a response for support of the Constitutional amendment by 5 p.m. on Tuesday, April 21.

Under the Governor’s budget proposal, Mainers with low and fixed incomes are provided $180 million annually to lower property taxes and protect our most vulnerable:

• The Property Fairness Tax Credit is tripled for low-income Mainers to $90 million annually;
• The Homestead Exemption tax credit is doubled for Mainers 65 and older to $20 million annually; and
• The Sales Tax Fairness Credit provides $70 million to help low-income Mainers recoup what they have spent on sales tax. The plan also eliminates taxes altogether:
• The income tax on military pensions is eliminated to encourage our veterans to live in Maine; and
• The estate tax, or “death tax,” is eliminated to ensure multi-generational small businesses and farms stay in Maine families. In addition to eliminating the death tax, income tax will be exempt on pension income up to $35,000, encouraging residents to retire in Maine and keep their assets here.

The plan modernizes Maine’s outdated tax structure by broadening the volatile sales tax base and rates to include both goods and services. It also exports the sales tax burden to more than 30 million visitors to Maine each year.

More information on Governor LePage’s tax plan is available on the Office of the Governor website: http://www.maine.gov/governor/lepage/publications/FINAL.TaxReformBooklet.pdf .

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