Maine legislators seek to tax state’s top earners
(The Center Square) – A group of Democratic lawmakers want to tax Maine’s top earners to help fund the state’s pandemic recovery and boost low-income workers.
One proposal, HP 361 filed by state Rep. Michael Sylvester, D-Portland, would impose a 3% tax on Mainers who earn more than $200,000 a year. The money would be earmarked for Maine’s Earned Income Tax Credit program, which is claimed by about 90,000 low-income workers.
Another proposal, HP364, filed by state Rep. Heidi Brooks, D-Lewiston, would increase the state’s top rate on corporate income from 8.93% to 12.4% to raise revenue for services and programs and pandemic recovery.
The bills were among several wealth and corporate tax hike proposals that went before the Legislature’s Taxation Committee on Tuesday during a livestreamed hearing.
In testimony submitted to the committee, Brooks wrote that corporations are “thriving and profiting” during the pandemic while average Mainers are suffering financially.
“Many are struggling to afford housing, utilities, food and healthcare. Even before the pandemic it wasn’t uncommon for people to have two or three part time jobs, without benefits, to try to support themselves and their families,” she wrote. “Many of the multi-million dollar corporations are profiting while their employees aren’t even making a livable wage.”
House Speaker Ryan Fecteau, D-Biddeford, has filed a bill to add a temporary tax bracket for the state’s top earners.
In 2016, Maine voters passed a referendum slapping a 3% annual surcharge on household income exceeding $200,000 to help fund public education. But the law was later overturned by GOP lawmakers and former Republican Gov. Paul LePage.
Last month, a coalition of Maine social justice organizations sent a letter to lawmakers urging them to back proposals to raise $400 million by taxing corporations and the state’s top earners.
“These proposals would improve both the fairness and adequacy of Maine’s tax code and would help raise the revenue necessary to fuel our COVID recovery and build a stronger, more equitable future,” the coalition wrote.
Recent polls have shown widespread support among Mainers for taxing the wealthy to fund state programs.
But David Clough, state director for the Maine chapter of the National Federation of Independent Business, pointed out the 2016 referendum passed by a narrow margin and said proposals to revive the wealth tax would hurt the middle class and businesses.
The proposals would also face pushback from Gov. Janet Mills, a Democrat who has said she opposes wholesale tax increases.
Michael Allen, associate commissioner of tax policy for the state Department of Administrative and Financial Services, said the proposals would give Maine “the highest individual income tax rate and the highest corporate income tax rate in the country.”
“These proposals come at a time when the Maine economy is struggling to cope with the impact of the pandemic,” Allen wrote in testimony to the committee. “While we are seeing some positive signs, avoiding tax increases of this magnitude is an important component in well positioning the state to economically rebound quickly and strongly.”
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