MHPC: Tax reform law 'unconstitutional'
The Maine Heritage Policy Center, a conservative think tank in Portland, yesterday challenged the recently enacted tax reform law, calling it "unconstitutional" and threatening legal action if the Legislature does not change it.
At issue is the section of the tax reform law affecting Maine's income tax. The law lowered the top income tax rate for Maine residents from 8.5% to 6.5%, but it also replaced deductions and personal exemptions with a "household credit" of $2,200, which is only available to Maine residents who have lived in the state for at least a year. Denying the household credit to all but established Maine residents is the equivalent of a "Welcome Back" tax for people moving or returning to the state to live and work, Tarren Bragdon, CEO of the Maine Heritage Policy Center, said at a press conference yesterday. "It would be disingenuous for me to say I was surprised, but I think most Mainers will be outraged to learn that the folks in Augusta had actually set up a new punitive welcome-back tax on families returning home to Maine," Bragdon said.
Arnold Clark, director of the Center for Constitutional Law at the Maine Heritage Policy Center, said the new law violates at least three provisions of the U.S. Constitution: the commerce clause, which prohibits states from interfering with interstate commerce; the privilege and immunity clause, which requires that when states create a benefit for residents it cannot deny the benefit to similarly situated nonresidents; and the equal protection clause, which prohibits states from creating classifications of people that infringe upon fundamental rights. "The Maine Heritage Policy Center is committed to challenging this illegal tax," Clark said. "If the Legislature does not act to fix the law then we will take our case to court and will ask the courts to do what the Legislature will not."
Maine Attorney General Janet Mills told the Portland Press Herald that she believes the law is "defensible from a constitutional standpoint," citing the fact that states often offer tax credits to residents, such as property tax rebates and in-state tuition, that are not offered to nonresidents.
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