AUGUSTA — A bill submitted by Republican Gov. Paul LePage that aims to eliminate the state’s estate tax came under fire Thursday as Democrats assailed him for offering “another tax cut” to the state’s “super wealthy.”

A law change in 2015, passed over LePage’s veto, increased the exemption for estates from $2 million to $5.45 million to conform with the federal tax code, but earlier this week LePage introduced a bill to cut the tax entirely.

LePage’s 2015 budget proposal had included provisions to eliminate the estate tax  in 2017, which lawmakers rejected.

LePage’s latest bill, LD 1622, if passed into law, would take effect in January 2017.  But top Democrats on the Legislature’s Taxation Committee blasted the measure Thursday following a public hearing, arguing that 99 percent of Maine taxpayers were already exempt from paying the tax.

LePage will also have to submit a new two-year budget for the state in 2017 and is expected to again propose an elimination of the estate tax.

But top Democrats on the Legislature’s Taxation Committee blasted the measure Thursday following a public hearing, arguing that 99 percent of Maine taxpayers were already exempt from paying the tax.


In 2014, only about 25 families in Maine were required to pay taxes on inheritances of more than $2 million,  Sen. Nate Libby, D-Lewiston said in a prepared statement.

David Heidrich, the communications director for the state’s Department of Administration and Financial Affairs, said complete data for 2014 on the estate tax was not available but data for 2013 shows 94 percent of that year’s estate tax collections came from Maine families.

He said residents paid $25.8 million in estate taxes in 2013 and non-residents paid just $1.74 million.

In an email message to the Sun Journal Heidrich said 78 non-residents and 91 residents paid the estate tax.  He also disputed an estimated cost to the state budget of $18 million. Heidrich said LePage’s bill would only reduce state general fund revenues by $10.4 million in 2018 and by about $14 million in 2019.

Libby, among the chief critics of the proposal, said before the state’s wealthiest families are given a tax break, LePage should focus on helping the state’s working class.

But LePage finance officials argued getting rid of the estate tax won’t cost the state any money as the state is currently running a budget surplus.


Libby, the ranking Senate Democrat on the Taxation Committee, said he would continue to focus his efforts on working families. 

Maine is one of 19 states that still taxes inheritances. LePage has argued that it’s one more reason people choose to retire elsewhere. Eliminating the tax would cost the state budget an estimated $18 million.

That money, Democrats say, would have to be made up either at the local level or in cuts to other state programs and services.

LePage said earlier in the week that the tax was obsolete and hard-hits multi-generational Maine family businesses — including farms — largely for failing to exploit legal loopholes to avoid the tax.  

LePage and other Republicans who call it the “death tax” also argue that those who earned the wealth paid taxes on it during their lifetimes and their families should not have to be taxed on that money again when the person, often the head of a family business, dies.

“It has been said that the only thing certain in life are death and taxes,” LePage said in a prepared statement issued Tuesday. “You are taxed throughout your life on what you earn, what you buy, and what you sell. With ObamaCare, you are taxed just for being alive. It seems only reasonable that Maine should join the majority of states in this country that allow you to leave a nest egg for your loved ones without taxing it when you die.”

The Taxation Committee is set to meet on the legislation again Tuesday, March 8.

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