Maine Democrats have proposed levying an additional four percent tax on income earned over $1 million to fund public education.
Sponsored by Rep. Cheryl A. Golek (D-Harpswell), LD 1089 would impose this new “surcharge” on income beginning with that generated this year.
The four percent tax would only be applied to the portion of a Mainer’s income that is above the $1 million threshold, meaning that everything up to that point would not be subject to this additional fee.
As the law is currently written, revenue collected from this tax could only be used to fund public pre-kindergarten through grade 12 education.
Cosponsoring this bill are Sen. Mike Tipping (D-Penobscot), Rep. William R. Bridgeo (D-Augusta), Speaker of the House Ryan D. Fecteau (D-Biddeford), Rep. Gary Friedmann (D-Bar Harbor), Rep. Drew Gattine (D-Westbrook), Rep. Laurie Osher (D-Orono), Rep. Ambureen Rana (D-Bangor), Rep. Suzanne M. Salisbury (D-Westbrook), and Sen. Jill Duson (D-Cumberland).
A public hearing for this bill will be held on Wednesday, March 26 at 10am in State House Room 127. Testimony may be submitted online at www.mainelegislature.org/testimony.
Click Here for More Information on LD 1089
Along these same lines, LD 1047 — sponsored by Rep. Grayson B. Lookner (D-Portland) — looks to impose an additional four percent tax on capital gains earned by residents over a certain threshold.
Capital gains refers to the increase in the value of an asset between the time it is acquired and when it is sold. These assets include a wide range of investments, including stocks, bonds, or real estate, as well as items purchased for personal use, like furniture or a boat.
Federally, most filers are required to pay 15 percent of their long-term capital gains in taxes.
Currently, Maine taxes capital gains alongside all other forms of income. Under the current structure, this means that they are taxed at a rate of 7.25 percent at most.
This proposal, however, would impose an additional four percent tax on any capital gains earned over a particular threshold, bringing the maximum tax rate on this portion of Mainers’ income to 11.25 percent.
[RELATED: Maine Dems Looking to Impose Additional 4% Capital Gains Tax on Earnings Over Certain Threshold]
Another proposal that has been introduced this year seeks to restructure Maine’s income tax code so that those who are making over $144,500 annually are taxed at a higher rate.
If approved, this bill would see the Maine’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.
Working in the opposite direction, Maine Republicans have introduced bills that would eliminate the state’s income tax altogether. While one proposal would do away with the tax immediately, another would gradually phase it out over the course of the next few years.
The law that would eliminate the income tax right away, beginning with the 2026 tax year, would also require the development a zero-based budgets for fiscal years 2026-27 and 2028-29.
From that point on, all departments and agencies in the Executive, Legislative and Judicial Departments of State Government would be required to create a zero-based budget at least once every eight years.
In other words, all corners of the state government would regularly be required to reconsider all aspects of their spending and rebuild their budgets from the ground up.
[RELATED: Should Maine Be Charging Residents Income Tax? These Lawmakers Don’t Think So]
The other proposal on the table, which would eliminate the state’s income tax gradually, would begin taking effect in 2026, gradually phasing it out over the next few years, with Mainers paying a smaller and smaller percentage of the state income tax until it is eliminated entirely in 2030.
If approved, this legislation would result in the elimination of state income tax both for individuals and corporations.
In conjunction with this, the Bureau of the Budget would be directed to reduce the state’s budget proportionally, so that overall expenditures and revenue are reduced in corresponding measure.
[RELATED: Here’s How Republican Lawmakers Plan to Phase Out Maine’s Income Tax by 2030]
Public hearings have already been held for both of these bills. Members of the Taxation Committee will now be holding work sessions to discuss the proposed legislation further before making a recommendation to the full chamber.
<span class="dsq-postid" data-dsqidentifier="36778 https://www.themainewire.com/?p=36778">13 Comments
They want to stand on their boys in girls sports. They must fund it somehow. Not many with incomes like that in the state. They will be out of here with the new socialist taxes.
Soon only Chinese pot growers left (who obliviously don’t pay taxes). Just the way mills tiny brain would like it.
We’re dead last in education so I guess as a Maine voters we would like to know what you’re gonna do differently before we even think about giving you any more money. Oh that’s right it’s not up to us. Democrats are just gonna do whatever you want without our money without asking us.
Stupid, most people who could reach that tax would have a “primary” home in Florida anyway, it would just make more people buy a “primary” residence in states with no income tax.
Straws …grasping at straws .
Democrats are done and they know it .
Turn the poor against the rich . They want you to think the rich are to blame for all the problems that they have caused . Democrats and their taxes are the root of evil in Maine .
What business and innovation have the Democrats brought into the state over the last 8 years?? Seriously asking, because it seems to me the only revenue innovation the Democrat majority can think of is to TAX, TAX TAX the electorate…not good, not good, not good
Who do Democrats think employs people in Maine? Small business owners. Who do Democrats think are going to be affected by these tax hikes? Small business owners will move to New Hampshire and take the jobs with them. Democrats are so ignorant.
Again punishing success to fund failure
How much income will the “millionaire tax” add to the state income?
When my budget looks lean, I have to work harder, be smarter with my money, and cut back on frivolous spending. Why doesn’t the government have to be held to this standard? When I try harder, I succeed. That makes me a success. Why am I being punished for working harder and smarter? Yes, PUNISHING SUCCESS TO FUND FAILURE. The new Maine.
Here’s the typical democrat solution to everything! Throw more money at the problem, only to create another problem! We already spend more than any other country, and where did that get us? The BOTTOM!!
People with substantial incomes are very mobile and contribute more than average amounts to consumption and job creation. They have a breaking point to become part of the 183 days elsewhere club. The purveyors of political power are doing everything they can to degrade the way life should be. We require change in the backsides that occupy seats of the executive and legislative comfy chairs of Augusta.
New York and New Jersey tried this. The rich left the state, then they had only the middle class to tax