Sen. Eric Brakey, R-Auburn, laid out a plan to bulldoze many of Maine’s convoluted set of business tax exemptions.
The plan from Brakey is just a concept at this stage, but he told the Legislature’s Taxation Committee that it targets 47 tax programs that he termed “corporate welfare,” costing the state between $425 million and $448 million over two years. He would use the savings to eliminate Maine’s corporate income tax and lower income taxes.
Under the proposal, the two biggest targets are $135 million in just two programs affecting more than 6,000 businesses— the Business Equipment Tax Exemption and the older Business Equipment Tax Reimbursement — that help businesses recoup property taxes paid on equipment purchases.
Also among the targets are tax breaks that seem relatively inconsequential in the bigger pictures, including a sales tax refund on windjammer parts that affects 10 taxpayers.
Brakey’s plan looks to thread a political needle: He said it’s designed to bridge a gap between Republicans who “hate taxes” and Democrats who “hate corporate welfare.”
Maine has long wrestled with not being able to evaluate the effectiveness of its hodgepodge of tax breaks and the Legislature’s watchdog committee is evaluating that now.
Democrats and Republicans praised the idea, but behind each tax break is a constituency, and Rep. Matthew Pouliot, R-Augusta, told Brakey that if the proposal was more fleshed out, there would be a line “out and around the Capitol 10 times” with businesses testifying against it.
The main challenge is that Maine’s business community is likely to oppose these changes: Maine State Chamber of Commerce lobbyist Linda Caprara told the committee “there’s a reason” that the breaks exist, and the state’s package of incentives isn’t generous compared to other places.
Maine Sen. Eric Brakey
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