A Democrat-led bill restructuring Maine’s income tax brackets is officially set to go before the Legislature’s Taxation Committee for a public hearing today.
If approved, this proposal would result in higher taxes on the state’s individuals who earn more than $144,500 per year.
The public hearing for this bill will be held on Thursday, February 27 at 1pm at the State House in Room 127. Testimony can also be submitted online at: www.mainelegislature.org/testimony
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 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.
Not only would this law create several higher tax brackets, but it would also institute a calculating change to how the income of Maine’s top earners is taxed.
Under Maine’s current income tax system, the tax rate for a given bracket is 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 would change for some earners, however, under LD 229.
To offset the lower rates that high earners would otherwise be paying on a portion of their income, the rates for the new brackets were set in such a way that they 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 for More Information on LD 229
This is not the first time that Maine lawmakers have attempted to restructure the state’s income tax brackets so as to impose a higher rate on top earners while simultaneously expanding the lower brackets.
Ultimately vetoed by Gov. Janet Mills (D), a bill passed by lawmakers in the 131st Legislature employed many of the same tactics seen in the bill currently before the Taxation Committee, LD 229.
Gov. Mills explained in her veto letter that she felt the bill did 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.
Want to learn more about the bill up for a public hearing this Thursday? Check out this story from the Maine Wire going into more detail: Tax the Rich — Democrat Lawmakers Look to Restructure Maine’s Income Tax Brackets, Raise Taxes on Top Earners
<span class="dsq-postid" data-dsqidentifier="35968 https://www.themainewire.com/?p=35968">7 Comments
8.2% let that sink in. Hell why not just go to 10% cuz that’s where you’ll be next year. Another welfare state thanks to the hollow heads in Augusta. This will be a boon for NH.
Makes moving to Florida an easier decision.
R’s seek to eliminate taxes, fraud and waste and abuse. D’s scheme to increase taxes, fraud, waste and abuse.
Lead us not into bankruptcy, deliver Maine from this evil and simply invest in deportation and STOP THE STUPID SPENDING!!!
I am willing to bet that little to no extra tax money will flow to Augusta and NH and Fla will see a rise in population. Democrats always punishing the successful.
OMG – can they come up with anything other than more taxes???
Good luck recruiting physicians or business owners. Good luck selling your business.
Democrats have absolutely lost their minds. They have already taxed Mainers (oh, except if you’re a state employee) for this foolish paid family leave idea. They have one of the most foolish energy policies in the nation that has led to much higher electricity costs. They are bloating the State of Maine budget from under $7 billion to $12 billion during Mills tenure, and now they are looking to punish the small business and professional class in the state? These morons don’t understand that if you are a professional person or a small business owner, you have options. Moving out of state for these people is easy, and Democrats wonder why young, well educated professional people don’t want to live in Maine. The level of economic ignorance here is astounding. I can never vote for another Democrat again.