The Consequences of Maine’s Income Tax Cuts

October 16, 2012

Recent Tax Cuts Increase Costs for Municipalities, the Poor, and the Middle Class

Governor LePage and the 125th Maine Legislature used cuts to income, pension, and estate taxes to transfer tens of millions of dollars to the richest Mainers. To pay for these tax cuts, lawmakers passed other measures that hurt low- and middle-income Mainers and shift the costs of education, road maintenance, fire and police protection, emergency assistance to families, and other basic services to Maine’s cities and towns. This will result in higher property taxes for many low- and middle-income Mainers, making an already unfair state and local tax system even worse.

MECEP estimated the property tax increase resulting from cuts to property tax relief and state aid to municipalities and local schools. Comparing the cost of this property tax increase to the benefits of the income tax cut enacted in 2011, MECEP projects that 270,000 families—40% of Maine’s taxpayers—will see an increase in their total state and local tax bill. These are low- and lower middle-income families who can least afford to pay more taxes.

This is the wrong direction for Maine. Instead of cutting taxes to benefit the wealthy, we need to move toward a fair tax system and invest more in schools, roads, health care, and other basic services that strengthen communities and make our economy more competitive.

struggling taxpayerby Garrett Martin, MECEP Executive Director and Joel Johnson, MECEP Policy Analyst

The Consequences of Maine Income Tax Cuts

Fact Sheet: The Consequences of Maine’s Income Tax Cuts

Selected charts from The Consequences of Maine’s Income Tax Cuts: Recent Tax Cuts Increase Costs for Municipalities, the Poor, and the Middle Class