Legislature splits the difference in final tax conformity compromise

August 30, 2018

Mario Moretto, Communications Director
(207) 620-1101

AUGUSTA, Maine —  The Maine Center for Economic Policy has released a new policy brief containing analysis of the tax package enacted by the Maine Legislature on Thursday night.

The Maine law, enacted with bipartisan support, represents a compromise between legislative Republicans, who backed Gov. Paul LePage’s plan to replicate President Trump and Congressional Republicans’ tax cuts for the wealthy and profitable businesses, and Democrats, who proposed policies to benefit low- and middle-income families.

The compromise contains elements of the Trump tax plan, but it rejects the worst policies proposed in Gov. Paul LePage’s tax conformity bill — including expanded tax breaks for Maine’s wealthiest estates, loopholes for businesses that make out-of-state investments, and giveaways to the state’s largest profitable corporations. At the same time, it expands the Property Tax Fairness Credit — a vital, income-based property tax relief program for Maine homeowners and renters.

The final legislation costs $26.8 million this budget cycle — less than either the governor’s or the Democrats’ initial offerings — thereby preserving more public resources for investments in Maine’s people and communities.

Click here to read MECEP’s full policy brief on the compromise tax law.

The following quote is attributable to MECEP Executive Director Garrett Martin:

“In the face of tremendous pressure to simply revise the state tax code to reflect the lopsided rewrite of federal tax law, Maine’s legislators opted to chart their own course. They rejected the worst policies handed down by Congress and proposed by the governor. And while the bill still contains some unnecessary and ineffective tax breaks for profitable businesses, the inclusion of an expanded Property Tax Fairness Credit will make a real difference for some of the low- and moderate-income Mainers left behind by the Trump tax cut.

“While the bill is imperfect, MECEP applauds lawmakers for asserting Maine’s authority to make its own decisions about taxes, rather than simply accepting policies handed down by Congress whether they work for Mainers or not. The Legislature also provided a meaningful lesson to future elected officials: No tax policy decision is a fait accompli. Maine always has a choice, and we should do whatever we can to ensure Maine’s tax code works for the communities and families of our state.”