- Associated Press - Monday, January 12, 2015

AUGUSTA, Maine (AP) - Republican Gov. Paul LePage’s plan to overhaul Maine’s tax code could put some GOP lawmakers in the tough position of having to throw their support behind an idea they once opposed - and used to attack Democrats in order to get elected.

But LePage is trying to make the case that his proposal to lower the income tax by raising and expanding the sales tax is different than the one the GOP led the charge against four years ago.

The $6.3 billion budget plan that LePage described Friday seeks to reduce the individual income tax rate from 7.95 percent to 5.75 percent by 2019 and the top corporate rate from 8.93 to 6.75 percent by 2021. It would be partially paid for by raising the sales tax and expanding it to cover such things as movies, concerts, garbage removal and legal services.

A similarly designed law signed by Democratic Gov. John Baldacci in 2009 lowered the income tax rate from 8.5 percent to 6.5 percent, broadened the sales tax to items that were exempt and increased the food and lodging tax.

Republicans argued then that the law amounted to a bunch of new taxes on everyday purchases that would be felt by working-class residents and successfully put an initiative to repeal the law on the ballot. Sixty-one percent of voters supported its repeal.

LePage said Monday his proposal was different because it also eliminates the estate tax and income tax on military pensions - two pieces he says are vital to attracting young families to Maine and keeping retirees from going elsewhere.

He also stressed that the 2009 law was designed to be revenue neutral, while his plan is estimated to lower the overall tax burden on Maine residents by $300 million once it’s fully implemented.

“Three-hundred million is going to be back in people’s pockets, and my guess is, they’re going to buy things they like,” LePage said on WVOM-AM’s George Hale and Ric Tyler show.

Charlie Webster, the former chairman of the Maine Republican Party who led the charge to repeal the 2009 tax overhaul law, said he can’t conceive how Republicans in the Legislature will be able to support LePage’s plan, calling it an “attack on the very people” the GOP represents.

“We won the legislature in 2010 because Democrats made the decision to go after the working class and tax them,” he said. “Many of those legislators are now in the Legislature and it’s unlikely that they’re going to forget the fact that they were elected on this issue alone,” he said.

But Republican Senate President Michael Thibodeau, who vocally opposed the 2009 law and beat the Democrat who crafted it to enter the Senate, said that LePage’s plan is much more comprehensive. Thibodeau said he has concerns about raising any tax, but stressed that lawmakers need to look at the whole picture.

“The fact of the matter is that there are significant reductions in the income tax rate, and we have to factor that in and make sure that at the end of the day we have the best tax policy we can possibly have,” he said.


Follow Alanna Durkin at https://www.twitter.com/aedurkin

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