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Monday, February 9, 2015

LePage Budget Proposes Significant Tax Changes

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On Friday, Governor Paul R. LePage released his biennial budget.  The highly anticipated budget includes significant changes to the state’s tax system, as well as changes to health care and general assistance spending.

Tax Reform

While many suspected that Gov. LePage would eliminate the income tax all together, his tax reform proposal is more modest.  Instead of eliminating the state income tax, the budget reduces the top individual income tax rate from 7.95% to 5.75%.  The state’s corporate tax rate is also reduced by over 24% to 6.75%.

Taxes on all pensions would be reduced, and taxes on military pensions would be eliminated entirely.  Likewise, Maine’s estate tax would be removed.


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