Jacobson Proposes Eliminating Income Taxes on Military And Maine's Estate Tax

Today, Republican candidate Matt Jacobson will host what his campaign has dubbed a “Veterans Town Hall”, where he will unveil two separate policy proposals.

The first is a plan to eliminate the Maine state income tax on active duty and military retiree pay.  The second is a proposal to gradually phase out the state’s overall estate tax.

The town hall (being held at 4:00 pm at the Chocolate Church Arts Center in Bath), however, will be mostly focused on veterans issues – so obviously the proposal for eliminating income tax on military pay will probably get the most attention.  As his campaign points out, “26 other states do not tax military retirement pay, and 22 other states do not tax active duty pay while the service member resides outside of the state.”  The policy is clearly intended to signal that Maine will be friendly to military families under a Jacobson administration – morose than some neighboring states.

In a release yesterday, Jacobson had this to say about his proposal:

“I am proposing some immediate and direct solutions that will keep Maine people here in the state,” said Jacobson.  “Many would prefer to stay with their families and friends in the communities in which they live and work, but it has become a financial difficulty for them when compared to other states.

“Especially with the closing of BNAS, we face the possibility of losing more Maine people who have the skills that would benefit the state.  Many other states do not tax military retiree pay. We also have active duty Mainers who are changing their state of residency for tax reasons. This small investment is a win-win proposal to both retain both our active duty personnel and retiree military veterans in our state and to benefit from their knowledge and expertise.”

In addition to the military benefit – Jacobson will also be talking about doing away with the state’s estate tax:

Mr. Jacobson is also proposing to phase out the state’s estate tax, impacting all Maine families.  The tax brings in minimal revenue to the state but has the adverse impact of causing many retirees to change their Maine residency to another state that does not levy an estate tax.

Strategically, this fits into one of Jacobson’s core campaign plans – namely the military vote.  Jacobson himself is a graduate of the United States Naval Academy, and was a pilot in the Air Force – he is hoping to leverage that experience into support among the military community.

Military veterans represent roughly 13.9% of the state (source: Almanac of American Politics 2009), or 182,750 people.  Assuming Republicans make up roughly 33% of that base (which may in fact be a conservative estimate), that represents 60,307 potential voters.  Assuming 30% turnout in the primary (which again, among this particular base of voter may be conservative), Jacobson is essentially targeting 18,000 military veterans.  If he can win even half of that, he will net 9,000 votes, which if you recall my breakdown of what it will take to win (between 16,600 and 27,700 votes) represents a very strong base of support.

This voting bloc is not large enough to carry the state for anyone, but if any candidate – in this case Jacobson – can consolidate their support, it may certainly help put them over the top.

It should be noted, just for the sake of clarity, that Peter Mills was in the Navy and served in Vietnam.  Les Otten, Bruce Poliquin and Paul LePage do not have any military experience that I know of.