Baldacci proposes income tax reduction

Baldacci to propose income tax cut
By Mal Leary, Capitol News Service
Tuesday, August 12, 2008 - Bangor Daily News

AUGUSTA, Maine - Gov. John Baldacci said Monday he would propose lowering Maine's personal income taxes in the January session of the Maine Legislature, but how much depends on the state budget now being developed.

"We are going to be doing more budget cutting, more budget restructuring, more efficiencies," he said Monday in an interview. "We have only just begun that process with jails and school administrative districts. More needs to be done, and we are going to do more of that and reduce the income tax on earned income."

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Baldacci declined to say whether he has a target for reducing the income tax, or whether he will propose reducing the 8.5 percent maximum rate or seek to reduce the taxes Maine residents pay by other adjustments to the tax code. For example, increasing either the standard deduction or the personal exemption levels would reduce the amount of income tax a person pays, even if the person still pays taxes at the 8.5 percent rate.