This paper’s recent editorial, “Slow Down, You’re Moving Too Fast On Income Tax Plan,” was too quick to dismiss our plan and the taxpayer concerns that generated it.

L.D. 849 sets a goal of gradually reducing income taxes paid by Maine citizens. It is triggered only when the economy improves, and there is extra revenue over and above the budgeted needs of state government.

The extra revenue would go into a fund that would be used to gradually reduce the highest income tax rates over time until the maximum rate is 4 percent.

A similar version of our tax plan was enacted into law in 1995 when Republicans last held a majority in the Maine Senate. It was repealed by Democrats two years later.

Pat Callahan of WCSH recently asked then-Gov. Angus King: “What, if anything, would you like to do over?”

He responded by citing late Senate President Jeff Butland’s law to reduce the income tax rate over time with surplus revenues. King said: “We were afraid to do it because we were afraid it would create deficits down the road. It turns out we had four to five years of surpluses, and we could have done it.”

L.D. 849 operates in concert with a spending cap that was signed into law by Gov. John Baldacci in 2005. It was done, in part, to address a $1 billion deficit that he inherited from the King administration. When prosperous times return, it takes money above the statutory spending limitation, and returns it to taxpayers through gradual income tax rate reductions.

Rather than use excess revenue to create new programs, it will return it to taxpayers. A 4 percent income tax target will encourage people to reside in Maine year-round. It also will support a more vibrant economy when better times return.

 

Sen. Jon Courtney, R-Springvale, is the Senate majority leader. He represents District 3, which consists of Alfred, Limington, Lyman, Sanford, Springvale and Waterboro.