Augusta, Maine (Wednesday, May 11, 2011)—The Maine Center for Economic Policy (MECEP) today released its analysis of the tax provisions contained in the Administration’s May 6 “change package” at a State House rally of the Maine Can Do Better Coalition (MCDB). A founding MCDB partner, MECEP’s fact sheet updates its analysis of the Administration’s revisions to its original biennial budget proposal in light of newly released revenue projections. MECEP’s fact sheet, “The Administration’s Latest Tax Plan: Déjà vu all over again,” examines the updated package which includes tax cuts that cost roughly $199 million in the 2012-2013 biennium and balloon to approximately $399 million in the 2014-2015 biennium.
“Ignoring the opportunity to craft a more affordable and fair plan, the Administration largely chose to stay the course,” MECEP’s analysis concludes. “The change package reaffirms the Administration’s taxation principles: fiscally irresponsible tax proposals that primarily benefit Maine’s wealthiest taxpayers funded by cutting investments in our people and our communities. The plan also shifts costs to municipalities and local property taxpayers, worsening Maine’s revenue shortfall and undermining our economic recovery.”
MECEP’s analysis finds that the revised plan eliminates the state alternative minimum tax on individuals, lowers the top income tax rate in 2013 from 8.5% to 7.95%, doubles the estate tax exemption from $1 million to $2 million and implements a new tiered rate structure, and cuts property tax relief to more than 75,000 low and middle income Maine families by 20%, as much as $400.
“Rather than add to our budget woes by cutting about $200 million in taxes that primarily benefit the wealthiest taxpayers, we should first seek to protect investments in people, education, infrastructure, and other services while honoring our commitments to our state workers and retirees,” the fact sheet notes. “Paying for these tax changes will undermine investments in Maine’s working families and communities and ignore our commitments to public employees and retirees. If tax relief remains a priority, it should target working families who pay disproportionate shares of their incomes in taxes but can least afford to do so. Tax relief should not come at the expense of our most vulnerable populations including those who were most hurt by the Great Recession.”
Maine faces a more than $800 million revenue shortfall, due primarily to the recent steep economic downturn.
“The Administration’s Latest Tax Plan: Déjà vu all over again,” is available on MECEP’s website, click here.