A group of Democratic lawmakers have put forward a plan to restructure Maine’s income tax brackets, a proposal that will result in higher taxes on the state’s individuals who earn more than $144,500 per year.
LD 229 — An Act to Bring Fairness in Income Taxes to Maine Families by Adjusting the Tax Brackets and Tax Rates — was sponsored by Rep. Ann Higgins Matlack (D-St. George). The progressive tax scheme is also cosponsored by Rep. Anne P. Graham (D-North Yarmouth), Rep. Lori K. Gramlich (D-Old Orchard Beach), Rep. Julia A.G. McCabe (D-Lewiston), Rep. Amy J. Roeder (D-Bangor), and Rep. Melanie F. Sachs (D-Freeport).
If approved, this proposal would see the state’s highest earners be taxed by up to 1.05 percent more than they currently are, bringing Maine’s maximum tax rate to 8.2 percent.
To accomplish this, three new tax brackets would be added to encompass individuals earning over $144,500, heads of household earning more than $216,750, and married couples making over $289,000.
The proposed law would also nearly double the upper threshold for the state’s lowest income tax bracket, allowing a broader swath of Mainers to qualify for it.
[RELATED: Mills Told GOP She’ll Sign Any Tax Hike Democrats Send Her in Majority Budget…]
Currently, to be eligible for the 5.8 percent income tax rate, individuals must make less than $21,050, while heads of household must make under $31,550, and married couples must earn below $42,100.
With the proposed changes, these ceilings would be raised to $41,600, $62,400, and $83,200 respectively.
Maine’s income tax structure is currently comprised of three tax brackets with rates of 5.8 percent, 6.75 percent, and 7.15 percent.
The top rate of 7.15 percent applies to any individuals earning $50,000 or more, heads of household making over $75,000, and married couples bringing in more than $100,000.
Should the changes proposed by these Democratic lawmakers be approved, those making close to this threshold would see their tax rate decrease to 6.75 percent, while those making substantially higher amounts would either see their taxes increase or remain unchanged.
The proposed restructuring would add brackets with rates of 7.52 percent, 7.15 percent, and 8.2 percent, in that order.
Under Maine’s income tax system, the tax rate for a given bracket is only applied only to the income earned over the upper-threshold of the previous bracket.
For example, an individual earning $49,000 would be taxed at a rate of 5.8 percent on the first $21,050 of their income and at a rate of 6.75 percent on the remaining $27,950.
This structure helps to explain why the new tax brackets proposed in LD 229 seemingly appear out of order, as the new 7.52 percent bracket is sandwiched in between two brackets taxed at 7.15 percent.
While this higher rate may seem like a targeted tax increase on those earning a particular amount of income, it is likely included in order to somewhat counterbalance any savings these taxpayers would otherwise have seen on the initial portions of their income that fall under the state’s lower tax brackets.
This would effectively result in the entirety of top earners’ income being taxed at higher rates than lower earners’ income, not just the portions of their annual income that are above a given threshold.
Click Here to Read the Full Text of LD 229
This same tactic was utilized by the lawmakers in the 131st Legislature who introduced a similar bill which would have raised the state’s top tax rate to 8.45 percent.
Also mirrored in this legislation is the proposal to substantially raise the upper limit on the state’s lowest tax bracket.
This bill was ultimately vetoed by Gov. Janet Mills (D) on the grounds that it would not “deliver meaningful tax relief” to low-income Mainers.
She also argued that it would disrupt the stability of the state’s tax revenue due to the volatility of the highest-earners’ income sources.
“Maine’s highest income tax rate of 7.15 percent is the 10th highest state income tax rate in the country,” Mills said, “and there are concerns that increasing that top rate even further would create challenges for state budgeting, because it would increase the State’s reliance on a small number of taxpayers (less than 1 percent) whose income is disproportionately composed of highly volatile sources such as capital gains and business income.”
However, the Mills administration recently disclosed that, based on current revenue projections, Maine is facing a $450 million structural gap for the FY 26-27 biennium and a $118 million deficit in MaineCare spending for 2025.
In order to fill those holes, Mills has flip-flopped on her “No Tax Increases” campaign promise by proposing a massive increase in the tobacco excise tax, as well as smaller increases in taxes on hospitals, ambulances, and streaming entertainment services.
According to House Republicans who spoke last week with the Maine Wire, staffers from the Mills Administration have already signaled in closed-door meetings that the governor is prepared to sign another majority budget that relies on exclusively Democratic votes if GOP lawmakers refuse to support tax hikes.
LD 229 has been referred to the 132nd Legislature’s Taxation Committee where it will receive a public hearing in the coming months and be considered further by lawmakers.
Maine is not a place to own a small business.
PAY ATTENTION TO WHO IS SPONSORING THIS TAX NEWEST GRAB ,
All Democrats .
A hundred forty four thousand five hundred dollars IS A HIGH Big Shot Earner INCOME ?
That’s probably not the case anywhere but here IN Maine .
Most of the bureaucrats in Augusta earn a hell of a lot more than that !
What a joke Janet Mills is .
The great migration is about to begin . Time to get TF outta here !
Maine is being flushed by Janet Mills and the Augusta Democrats !
DONT FORGET ON ELECTION DAY .
THESE DEMOCRATS NEED TO GET SENT HOME .
How much will King have to pay? And Pingree pay?
Cut, it is a four letter word. Republicans need to let the democrats hang themselves.
OR..OR you could cut some of the $4 Billion+ spending increases over the Mills’ tenure. Democrats only have 1 fix for all problems…..taxes. The solution to their misspending is to punish the top producers in the state. Funny thing, those top producers have options, they can move out of state. Look at the huge migration of top earners away from California and New York because of high taxes, Maine Democrats have learned nothing from that. Absolutely no common sense in this.
Steal from the makers to give more to the takers. Wait. Where have the doctors and dentists gone? Why are they leaving out state?
Governess Mills has given orders that Maine should bring in 75,000 illegal aliens…er sorry, “Newcomers”, and we are now finding out who she thinks should pay for their food, housing and medical care. That would be those of us living in Maine who work hard to make a decent living. Perhaps whereever it was that she went to school, they taught her that she should honor Karl Marx: “To each according to their need, from each according to their ability”.
The rich should pay ALL the taxes, period. Just bcuz THEY have the $$$$$. Anything else is just trying to get blood out of a stone. Property taxes, excise taxes, tobacco taxes, sales taxes are just let the rich off the hook.
Like the guy said, “maine is the retarded kid being pulled in a wagon by california and new york”.
How’s this sound? Stop spending money on stupid things we don’t need.
Higher taxes for higher income earners has not worked very well for New York or California. They have the income to move away. The Dems never learn.
…but this looks like a really small baby-step in the right general direction. I know! Let’s demand that nobody in gov’t gets to own one cent more than their poorest constituent. Then, let’s pay them the same UBI that everyone else gets. There would no longer be any need to “aid the poor”, since nobody would be poor, & most of the bureaucrats could be sent home to figure out something else to do w/ their time.
As it is the top earners pay almost all of the taxes that are collected.
This plan is only punishing success and rewarding failure and laziness.
With all the money they’ve spent on illegals it’s no wonder the state is broke.
Anyone else notice the sponsors of this poorly thought out bill are women? Liberal women.
Please Mr Robinson
Reprint your October 3rd article about Augusta democrats bragging about their overspending .
Shine a light on this
Just a reminder, the free state of NH welcomes all refugees from mills tax and over-spend state.(Sorry, not sorry only legal US residents need apply)
This is why I have chosen to not be rich. I’m happy living in the middle.
But we (conservatives) need to hold spenders accountable on both sides of the aisle. 12 more years baby!
Just watched ICE take down 6 Illegals in Boston area. A woman led the ICE group. No resistance from the woak mayor or Governor. Keep your eyes open governor!
Got to pay for that 61% pay increase right? This is what Mainers want because they keep reelecting these communists and the Republicans are useless at this point.
Invest in deportation and the state of Maine can $top raping & pillaging the legal American citizens in order to provide for the multitudes of illegal alien freeloaders that JANET HAS BEEN VOLUNTEERING to shelter. Deliver us from this tax slavery and injustice for all!!
Raising right hand, “I do solemnly swear that I will never vote for collins again”. She must be primaried The whole country swings right and here’s madam shakes the clown wondering if that seat was wet before she sat down. I hope when pete gets in he shuts down BIW and PNSY, thanks sue you moron.
I just started 3 weeks ago this web income system that my friend recommended to me and I’ve gotten 2 checks for a total of $9,200… this is the best decision I made in a long time! v2 This extra cash has changed my life in so many ways, thank you!
Here is I started_______ Rebrand.ly/homejobs25?/05
It’s about to get very hard to recruit dentists, surgeons and other high skill workers.This will hurt the BIW workforce.
James …..
Where do I find a dentist or doctor NOW ?
I can go to a county clinic maybe …..but try to find a specialist ….take a trip way down south .
“ Maine Health “ ….an oxymoron if there other was one .
And Maine Health is going broke from treating illegals for free .
Augusta democrats are the problem . We need to vote them out asap.
ALL of them