Out of Control Policy Blog

Maine Republicans Offer Tax Cuts

At a State House press conference earlier today, Republicans laid out a comprehensive tax reform and relief package that addresses Maine's onerous tax burden by lowering property and income taxes. Unlike other tax reform proposals, the Republican plan offers real relief without resorting to tax and fee increases.

The guiding principles of the Republican proposal are as follows:

*Limit growth in government spending.
*Make it more difficult to raise taxes.
*Let Mainers keep more of their paychecks.
*Set priorities and follow through on promises.
*Provide meaningful, long-term property tax relief.

"Our government spending is not in line with what people earn," said House Republican Leader Joe Bruno (R-Raymond). "We have to put a mechanism in place that protects Mainers paychecks from being eroded by state government. Then and only then can we tackle Maine's tax burden."

The Republican plan proposes a constitutional amendment that limits the growth in state government spending to the rate of inflation plus population growth. It proposes a constitutional amendment requiring a 2/3 vote of the Legislature to raise taxes or fees.

Senate Republican Leader Paul Davis (R-Sangerville) said, "The key to tax reform in Maine is to put these runaway budgets on a diet - once and for all. Presently, the Legislature spends every dime it gets its hands on and when that runs out, they borrow more. In my six years here in Augusta it has been the same old story and it is time for change."

"Spending in Maine has been growing more than twice the rate of inflation for far too long," said Representative Harold Clough (R-Scarborough), the ranking House Republican on the Legislature's Taxation Committee. "We need a constitutional amendment that caps the growth in spending. Had we done something similar 10 years ago, government spending in Maine would be $400 million less than it is today. That equates to a 15% reduction in the tax burden."

One of the major components of the Republican plan is to eliminate the income tax for all Maine families with incomes of less than $27,000. They also propose across the board reductions in income tax rates specifying that revenues in excess of the spending cap first be used for these purposes. It also provides long-term property tax relief by assessing property tax bills based on the purchase price of a home and pegging any future increases to inflation until that property is sold or transferred again.

"Maine people expect and deserve meaningful tax relief," said Senator Richard Nass, ranking Senate Republican on the Taxation Committee. "Our plan provides real property and income tax relief so that our friends and neighbors will not end up being forced out of their homes due to unfair tax assessments. Our plan addresses, head-on, the real problem that is driving property taxes upward - out-of-control government spending. Unless the Legislature is willing to deal with this reality, things will not improve. It is high time that we do more than provide mere lip service to tax relief. This plan accomplishes that goal."


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