House approves bill to cut state’s income tax

Posted April 05, 2012, at 6:07 p.m.

AUGUSTA, Maine — The Maine House has approved a bill to reduce the state’s income tax rate to a flat 4 percent.

After a lengthy debate, representatives voted 74-71 Thursday to approve a Senate-amended bill calling for the reduction. It relies on revenue surpluses initially to pay for the reduction.

The bill calls for 20 percent of one-time surpluses that would normally go to the state’s “rainy day” fund to instead pay for the income tax cuts.

Opponents said the bill diverts to income tax cuts money that should be going to municipalities in the form of revenue sharing and school funding. They said that shifts costs to property taxpayers.

Supporters said it lowers income taxes only after the state’s other obligations are met.

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