Scarinci Hollenbeck, LLC
The Firm
201-896-4100 info@sh-law.comFirm Insights
Gov. Paul LePage Proposes Corporate Income Tax Reform In Latest Budget
Author: Scarinci Hollenbeck, LLC
Date: April 1, 2015
Key Contacts
Back
Earlier this year, Maine Gov. Paul LePage released his 2016-2017 budget proposal. This document contained several suggested reforms, including a change in the state’s corporate income tax policy.
LePage has argued that currently, the state’s tax policy puts it at a disadvantage and makes it less competitive compared to not only states in New England, but also the entire nation. The governor has repeatedly aimed to provide both corporations and residents of The Pine Tree State with lower income taxes.
Tax reform for Maine
The $6.3 billion proposed budget, which LePage has claimed will save Maine $300 million per year by 2019, would cut state income taxes and make up for this lost revenue by increasing the sales tax, according to The Bangor Daily News.
The governor has championed income tax cuts before, spearheading a proposal in 2011 that resulted in Maine completely eliminating this particular burden for anyone generating an annual income of less than $5,000, the media outlet reported. In addition, his efforts caused the top tax rate to drop to 7.95 percent from 8.5 percent.
Now, LePage is looking to expand this tax relief granted to those in lower income brackets, as his budget would eliminate all state income taxes for those who bring in $9,700 per year or less, according to the news source. The proposal would also grant those with greater income progressively lower tax rates.
Corporate income tax reform
In addition to cutting income taxes for individuals, the governor’s proposal would also reduce the income taxes paid by corporations, lowering their top rate to 6.75 percent from 8.93 percent. LePage suggested making this change as Maine’s Revenue Forecasting Committee has forecast that during fiscal years 2016 and 2017, the state will bring in $8.1 million in revenue through the corporate income tax.
The committee based this prediction on estimates for corporate profits, stating that these earnings would expand at a somewhat more rapid rate in 2015 and 2016, after rising at a modestly slower pace in 2014.
Sales tax reform
While LePage has specifically targeted individual and corporate income taxes for reduction, he has taken aim at specific sales tax exemptions, maintaining that having such a policy lacks adequate justification, according to The Bangor Daily News.
He asserted that instead of taking money out of people’s paychecks, policy should provide a levy when they choose to buy goods and services, the media outlet reported. LePage’s proposal would still exempt certain basic items such as groceries from sales tax, but it would adopt an amusement tax that would affect purchases of goods and services such as golf course admission, movie tickets and admission to historical sites. He asserted that his plan is based in fairness.
“Everybody’s got to pay their fair share,” stated LePage, according to the news source. “We’re going to a consumption-based tax structure, so you pay as you go, rather than every Friday taking money out of your paycheck and sending it to the government.”
Outcome uncertain
Under these policies, LePage’s budget would generate $219 million in sales and use taxes in its first year, while at the same time providing the state’s companies and residents with $176 million less in income taxes, according to The Bangor Daily News.
It is worth noting that while cutting taxes – for example those on residents and corporations – would reduce revenue for the state, the benefit of the proposed policies is uncertain, the media outlet reported.
- Practices: Corporate Tax Planning
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
Does Your Homeowners Insurance Provide Adequate Coverage?
Your home is likely your greatest asset, which is why it is so important to adequately protect it. Homeowners insurance protects you from the financial costs of unforeseen losses, such as theft, fire, and natural disasters, by helping you rebuild and replace possessions that were lost While the definition of “adequate” coverage depends upon a […]
Author: Jesse M. Dimitro
Understanding the Importance of a Non-Contingent Offer
Making a non-contingent offer can dramatically increase your chances of securing a real estate transaction, particularly in competitive markets like New York City. However, buyers should understand that waiving contingencies, including those related to financing, or appraisals, also comes with significant risks. Determining your best strategy requires careful analysis of the property, the market, and […]
Author: Jesse M. Dimitro
Fred D. Zemel Appointed Chair of Strategic Planning at Scarinci & Hollenbeck, LLC
Business Transactional Attorney Zemel to Spearhead Strategic Initiatives for Continued Growth and Innovation Little Falls, NJ – February 21, 2025 – Scarinci & Hollenbeck, LLC is pleased to announce that Partner Fred D. Zemel has been named Chair of the firm’s Strategic Planning Committee. In this role, Mr. Zemel will lead the committee in identifying, […]
Author: Scarinci Hollenbeck, LLC
Novation Agreement Process: Step-by-Step Guide for Businesses
Big changes sometimes occur during the life cycle of a contract. Cancelling a contract outright can be bad for your reputation and your bottom line. Businesses need to know how to best address a change in circumstances, while also protecting their legal rights. One option is to transfer the “benefits and the burdens” of a […]
Author: Dan Brecher
What Is a Trade Secret? Key Elements and Legal Protections Explained
What is a trade secret and why you you protect them? Technology has made trade secret theft even easier and more prevalent. In fact, businesses lose billions of dollars every year due to trade secret theft committed by employees, competitors, and even foreign governments. But what is a trade secret? And how do you protect […]
Author: Ronald S. Bienstock
What Is Title Insurance? Safeguarding Against Title Defects
If you are considering the purchase of a property, you may wonder — what is title insurance, do I need it, and why do I need it? Even seasoned property owners may question if the added expense and extra paperwork is really necessary, especially considering that people and entities insured by title insurance make fewer […]
Author: Patrick T. Conlon
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Gov. Paul LePage Proposes Corporate Income Tax Reform In Latest Budget
Author: Scarinci Hollenbeck, LLC
Earlier this year, Maine Gov. Paul LePage released his 2016-2017 budget proposal. This document contained several suggested reforms, including a change in the state’s corporate income tax policy.
LePage has argued that currently, the state’s tax policy puts it at a disadvantage and makes it less competitive compared to not only states in New England, but also the entire nation. The governor has repeatedly aimed to provide both corporations and residents of The Pine Tree State with lower income taxes.
Tax reform for Maine
The $6.3 billion proposed budget, which LePage has claimed will save Maine $300 million per year by 2019, would cut state income taxes and make up for this lost revenue by increasing the sales tax, according to The Bangor Daily News.
The governor has championed income tax cuts before, spearheading a proposal in 2011 that resulted in Maine completely eliminating this particular burden for anyone generating an annual income of less than $5,000, the media outlet reported. In addition, his efforts caused the top tax rate to drop to 7.95 percent from 8.5 percent.
Now, LePage is looking to expand this tax relief granted to those in lower income brackets, as his budget would eliminate all state income taxes for those who bring in $9,700 per year or less, according to the news source. The proposal would also grant those with greater income progressively lower tax rates.
Corporate income tax reform
In addition to cutting income taxes for individuals, the governor’s proposal would also reduce the income taxes paid by corporations, lowering their top rate to 6.75 percent from 8.93 percent. LePage suggested making this change as Maine’s Revenue Forecasting Committee has forecast that during fiscal years 2016 and 2017, the state will bring in $8.1 million in revenue through the corporate income tax.
The committee based this prediction on estimates for corporate profits, stating that these earnings would expand at a somewhat more rapid rate in 2015 and 2016, after rising at a modestly slower pace in 2014.
Sales tax reform
While LePage has specifically targeted individual and corporate income taxes for reduction, he has taken aim at specific sales tax exemptions, maintaining that having such a policy lacks adequate justification, according to The Bangor Daily News.
He asserted that instead of taking money out of people’s paychecks, policy should provide a levy when they choose to buy goods and services, the media outlet reported. LePage’s proposal would still exempt certain basic items such as groceries from sales tax, but it would adopt an amusement tax that would affect purchases of goods and services such as golf course admission, movie tickets and admission to historical sites. He asserted that his plan is based in fairness.
“Everybody’s got to pay their fair share,” stated LePage, according to the news source. “We’re going to a consumption-based tax structure, so you pay as you go, rather than every Friday taking money out of your paycheck and sending it to the government.”
Outcome uncertain
Under these policies, LePage’s budget would generate $219 million in sales and use taxes in its first year, while at the same time providing the state’s companies and residents with $176 million less in income taxes, according to The Bangor Daily News.
It is worth noting that while cutting taxes – for example those on residents and corporations – would reduce revenue for the state, the benefit of the proposed policies is uncertain, the media outlet reported.