Maine House Republicans Bamboozled Into Bernie-Style Tax Hikes

A Republican bill passed the Maine House of Representatives late Thursday evening that will result in tax increases on high-earners who live in and work in the Pine Tree State after 2025.

The bill – LD 1231 – moved through the House amid confusion between Republican lawmakers as to what exactly the motion on the floor was, but the end result was that eight Republicans and every Democrat voted in favor of an earlier House roll call vote before the new tax-hiking scheme was passed with unanimous consent.

The bill now tabled in the Senate, but if passed and approved by Gov. Janet Mills (D), it would result in modest state tax decreases for individuals making $100,000 or less and joint filers making $200,000 or less.

But even as the state continues to over-collect state taxes and exceed revenue forecasts, the tax changes wouldn’t reduce the overall tax burden Mainers carry.

Instead, the changes would pay for minor reductions for Mainers making less than $400,000 per year by shifting the burden onto high earners, $1M+ per year.

“It’s unconscionable that lawmakers – particularly self-described ‘fiscal conservatives’ – would endorse a tax increase on anyone at a time when state government is bursting at the seams with revenue,” said Maine Policy Institute CEO Matthew Gagnon.

[Disclosure: The Maine Wire is a project of the Maine Policy Institute]

“Augusta was already spending an unprecedented amount of money, and is now debating what to do with surpluses piled on top of surpluses while simultaneously attempting to raid the Rainy Day Fund, and rob the Transportation Fund,” Gagnon said.

“Democrats hijacked LD 1231, a bill originally intended to cut state income taxes for everyone, and used it as a vehicle to enact their own radical tax agenda,” said Gagnon.

“Republicans who voted in favor of the committee report in the House should be ashamed of themselves, as should House Republican Leader Billy Bob Faulkingham for silently standing by, failing to organize his caucus to push back and not even ordering a roll call on the enactment vote,” he said. “If the bill manages to reach Gov. Mills’ desk, she should, for once, make good on her no-tax pledge and swiftly issue a veto.” 

Here’s how the tax bill would work, if Gov. Mills’ fails to issue a veto:

A couple filing jointly at the $200,000 range, for example, will save roughly $540 on their state income tax bill.

An individual making $30,000 per year will see a state tax reduction of $52.25, while an individual earning $60,000 per year will see a reduction of about $170.

However, on the higher end of the income level, individuals with incomes of $600,000 will see substantial tax increases.

For example, an individual earning in the $600,000 range — already footing a state tax bill of roughly $44,000 per year — would pay an additional $1,300.

A couple with joint income of more than $2 million per year would see their $155,015 per year state tax bill increase by $13,000.

While those might not seem like substantial changes to the tax code, if the added tax burden causes just 25 couples to live six months and a day in tax-free Florida instead of Maine, it would result in a decrease of more than $4 million in state revenue.

The entire process that led to the bills passage seemed mired in confusion, potentially the symptom of a mismanaged legislative calendar that has led to significant bills getting rammed through at odd hours of the night.

Originally introduced by Rep. Mickey Carmichael (R-Greenbush) as a concept draft, the bill was intended to leave tax rates unchanged while shifting tax brackets in order to reduce total state taxes paid by the lowest earning individuals and families in Maine — a measure consistent with the tax proposal Republicans unsuccessfully lobbied for last year.

However, the Committee on Taxation issued two separate “ought to pass as amended” reports on the bill.

One of those reports (C “B” (H-925 )), backed by Republicans on the committee, would have resulted in a reduction of income taxes for low-earning Mainers by a total of $20M – $30M per year, according to the fiscal note.

The other report (C-A (H-924)), backed by Democrats on the committee, would still expand tax brackets in a manner that reduces taxes slightly for low-earners, but it would change brackets on the higher income end to result in a net increase in tax revenue collected by the state.

While many Republican lawmakers believed they were supporting the Republican amendment, the motion on the floor was in fact the Democratic amendment. As a result, no Republican called for a roll call vote and the measure passed the House for enactment “under the gavel” — i.e. with unanimous consent.

In an initial House vote, which did receive a roll call Tuesday, eight Republicans joined Democrats to support the tax-hiking version of the GOP-sponsored bill. Those Republicans included: Carmichael, Rep. Danny Costain (R-Plymouth), Dean Cray (R-Palmyra), Rep. Randall Hall (R-Wilton), Rep. Caldwell Jackson (R-Oxford), Rep. Richard Mason (R-Lisbon), Rep. Abden Simmons (R-Waldoboro), and Rep. Roger Albert (R-Madawaska).

The day prior, the same measure had passed through the Senate on a strictly party line vote, with every Republican voting against, but the measure was tabled before an enactment vote could take place.

Neither the communications teams for the House Republicans nor the Senate Republicans responded to a request for comment.