Maine governor wants constitutional amendment to abolish state income tax

By Dave Sherwood

BRUNSWICK, Maine (Reuters) – Maine Governor Paul LePage on Tuesday proposed amending the state’s constitution to eliminate the income tax, telling lawmakers the strategy was the best way to make the tax cut he desires permanent.

The proposal, opposed by Democrats who control the state House of Representatives, would insert language in the state’s 195-year old Constitution permanently prohibiting the Legislature from imposing “a tax upon the income of any person,” beginning in 2020.

In a letter last week urging lawmakers to co-sponsor his bill, LePage, a Republican, said the bill would lift a burden from Maine’s large population of retirees who live on fixed incomes, as well as benefit higher-income “job creators,” although not without sacrifice, he wrote.

“I realize I am asking elected officials to voluntarily give up power they currently wield,” wrote LePage, who first announced his intention to eliminate the income tax in January.

LePage’s two-year budget would make up for lost revenues by increasing sales taxes, cutting off state revenue sharing with local municipalities and taxing some non-profit groups.

A constitutional amendment would require support by two-thirds of Maine’s Legislature. Democrats immediately rejected the proposal.

“Maine’s economy is at a crossroads. Our tax system is broken. It’s rigged for those at the very top,” said House Speaker Mark Eves, a Democrat. “The Governor’s proposal will make it worse.”

Democrats earlier this month offered a counter-proposal that would decrease, but not eliminate, the income tax, and lower property taxes, while keeping the sales tax unchanged.

If LePage’s proposal were enacted, Maine would become the 10th state to partly, or entirely, eliminate its income tax.

Seven states levy no income tax at all, while two, New Hampshire and Tennessee, tax only dividend and investment income, according to the Tax Foundation, a nonprofit and nonpartisan organization that measures federal and state taxes.

(Editing by Scott Malone and Peter Cooney)