AUGUSTA — Americans for Tax Reform, the group founded by conservative activist Grover Norquist, urged Gov. Paul LePage and state lawmakers Friday to reject a bipartisan proposal that would cut Maine’s income tax in half by raising sales and excise taxes.
In a letter to LePage and Maine legislators, Norquist, president of Americans for Tax Reform, said the proposal would result in a $700 million tax increase.
According to the bill sponsors, the proposal would yield a net $160 million in additional revenues when factoring in cuts in the income and corporate taxes, as well as the elimination of the estate tax.
Nonetheless, Norquist said voting for the plan would also violate the Americans for Tax Reform no-tax pledge.
The pledge has been used as a litmus test for some Republican state and congressional lawmakers by a conservative movement that has called for reduced government and taxes. Norquist is known for saying that he wants government to be so small that it can “be drowned in a bathtub.”
Norquist’s letter is a response to a dramatic tax reform bill introduced in Maine this week by a bipartisan group of lawmakers. The proposal would cut Maine’s top income tax rate from 8 percent to 4 percent by raising sales and excise taxes and taxing additional goods and services.
Proponents of the proposal say it would provide income and property tax relief to Mainers by levying additional taxes on nonresidents.
Norquist said the proposal was a massive tax increase.
“Tax reform must be revenue neutral,” he wrote. “A vote in favor of this legislation, as written, is a violation of the Taxpayer Protection Pledge. If the goal of the legislature is to reform the tax code and make the state more attractive to job creators, that goal should be accomplished without increasing the state’s overall tax burden.”
Sen. Roger Katz, R-Augusta, was puzzled by Norquist’s letter.
“I wonder if Mr. Norquist has read the actual bill,” said Katz, adding that nearly every Maine resident would pay less in taxes than they do today if the proposal passed.
Katz said the bill contained a number of pro-growth policies. He said Maine’s income tax currently hindered economic growth.
The letter illustrates the national attention that the tax reform proposal is expected to garner. Maine is one of five states this year to consider a significant overhaul of its tax system.
Lawmakers and affected industry groups have given a tepid response to the tax reform proposal.
Two of the tax reform bill’s co-sponsors have taken Norquist’s no-tax pledge, Reps. Gary Knight, R-Livermore Falls, and Dennis Keschl, R-Belgrade. Knight is the bill’s lead sponsor.
LePage has also signed the pledge.
Steve Mistler can be contacted at 620-7016 or at: