Maine Gov. Paul LePage's Bold Goal To Eliminate The State's Income Tax Jul 19th 2013, 08:00
Maine Gov.Paul LePage (Photo credit: Wikipedia)
No one ever claimed that reform is easy. Real change – the type of improvement that betters the lives of families, small businesses, and communities – takes time and determination. When it comes to income tax reform, Maine Governor Paul LePage may not have an infinite amount of time (he is on record saying that he wants to completely eliminate the state income tax by the end of his second term), but he certainly has plenty of determination.
Maine doesn't attract the level of derision that extremely high-tax states (like New York) do. People rarely point to Maine as a textbook example of a harmful tax environment. Yet, Maine's tax structure is far from ideal. While it's easy to point fingers at such downward-spiraling states as California, Maine's slow growth indicates that now is the time for change. The state's top tax rate of 7.95 percent kicks in for incomes of just $20,900 (even in California, that income would only be taxed at 4 percent). That's unfair to working-class families striving to catch the next rung on the economic ladder.
Plus, while Maine and neighboring New Hampshire have similar populations, Maine's growth since the 2000 census has lagged behind New Hampshire's by more than 2.5 percentage points (4.24 percent, versus New Hampshire's 6.88 percent). The difference between the neighbors? New Hampshire boasts a much friendlier business environment, with an income tax rate of zero.
Fortunately, Governor LePage clearly understands Maine's current place in the economic pecking order (11th-highest tax burden, and the 15th-worst state in which to do business), and he's working to make meaningful change in his state. In a recent opinion piece in the St. John Valley Times, LePage reminds citizens that he "proposed legislation that would . . . decrease taxes, reform welfare, create jobs and improve education." He adds that, unfortunately, his opponents in the legislature "would rather enact a bad budget that harms Mainers than make the hard choices and face the consequences at the next election."
Unlike the politicians who opposed his bold plan, Governor LePage sees tax reform as absolutely essential to the creation of a successful, thriving Maine. The data supports LePage's message and his plans for public policy. Over the past 18 years, Maine has lost hundreds of millions of dollars to states that do not levy an income tax. Florida gained an astronomical $798.78 million of Maine's net adjusted gross income (AGI). (Portland, the largest city in Maine, lost the most wealth to four Florida counties: Polk, Collier, Lee, and Sarasota.) Nevada siphoned off $46.62 million. Tennessee netted $27.99 million.
Governor LePage is a man of principle, and at the end of the 2013 session he refused to be swayed by a watered-down budget that would reduce income tax but harm Maine businesses by raising sales, meals, and lodging taxes.According to an Associated Press report, LePage "said he felt like Charles Cornwallis, a British general during the American Revolution who 'won most of the battles, but lost the war.'"
Luckily for the future of Maine, LePage is not one to quit without a fight. The governor plans to resubmit the income-tax elimination proposal first thing in January. In the meantime, his opponents need look no further than states like Wisconsin, Kansas, and Ohio to see how tax reform can make a real difference in states' successes. Hopefully, within a matter of months, Governor LePage's ambitious ideas will be reality.
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