A version of this article was originally published in The Daily Brief, our Maine politics newsletter. Sign up here for daily news and insight from politics editor Michael Shepherd.
After talking about the idea for years, former Gov. Paul LePage kicked off his Blaine House return bid just over one year ago. It began in earnest with a September rally in Augusta, where he renewed an old push to eliminate Maine’s income tax.
That goal was a white whale of his eight-year tenure. The problem with getting rid of the tax is that it is the dominant source of revenue for Maine’s government. Last year, it was expected to generate 44 percent of the state budget at $1.8 billion.
In his first term, he pushed through a major income tax cut under one term of Republican control of Augusta. But when he tried to phase out the income tax by bringing down top rates and then offsetting those changes by raising and broadening the sales tax, it kicked off a war between LePage and Senate Republicans. The idea ended up going nowhere.
He is proposing a different path this time, saying in radio appearances and speeches that he plans to start by first eliminating taxes on senior pensions now exempt up to $35,000. After that, LePage says he would increase exemptions for others from the bottom up until the income tax is phased out.
The Republican framed it in a Tuesday interview with WVOM as a response to Democratic criticisms of his prior tax proposals being aimed at the rich. At the same time, he said he wants to eliminate the estate tax, which would only affect a small number of families with assets above $6 million.
LePage has not said exactly how he would offset the plan to start. He and other Republicans have said the two-year budgets passed under Democratic Gov. Janet Mills have been too high, which would indicate some preference for spending cuts. Federal aid has left the state flush with record reserves. Using that to fund tax cuts relies on rosy ongoing forecasts that LePage has not shared.
While the estate tax has topped out at around $40 million in recent years and may be able to be ended in a two-year budget, the senior pension changes would be bigger. Deep changes would assuredly need offsets. There are past clues in how LePage might approach that.
His last budget proposal in 2017 was criticized by the liberal Maine Center for Economic Policy, which said it would raise taxes on 80 percent of Mainers when taking all of the income, sales, property and other tax changes into account. It was accompanied by $140 million in health department cuts largely affecting MaineCare and cash assistance.
Previewing the campaign ahead, the Maine Democratic Party has pointed to past plans to say LePage would likely send other taxes ” through the roof,” while he has pitched a unified Republican strategy to take over the State House.
“We intend to win the House, the Senate and the governorship and we are planning to fix Maine once and for all,” he said on Tuesday.
A shift away from income taxes to other taxes or more cuts would lead to a huge policy debate in Augusta, even if Republicans were immediately on board, unlike the last half of the LePage era. They would need legislative majorities for the idea to be entertained. For now, neither that nor LePage victory is assured. The math of this proposal also needs a lot of fleshing out.