Please call your legislators today and urge them to oppose bills to increase individual or corporate income tax rates in Maine!

This alert is brought to you by the Maine Coalition to Defeat Income Tax Increases. The Maine Coalition to Defeat Income Tax Increases is currently comprised of representatives from the Maine State Chamber of Commerce, the Maine Hospital Association, the Maine Grocers and Food Producers, the Maine Bankers Association, the Maine Auto Dealers Association, the Retail Association of Maine, Maine Tourism, Hospitality Maine, the Maine Aggregate Association, and the Manufacturers Association of Maine. If you are interested in joining this coalition, please contact Linda Caprara at the Maine State Chamber of Commerce by calling (207) 623-4568, ext. 106, or by emailing [email protected].

The Joint Standing Committee on Taxation has scheduled the following public hearings for Tuesday, March 16 beginning at 1:00 p.m.:

• LD 495, An Act to Improve Income Tax Progressivity by Establishing New Top Individual Income Tax Rates;
• ŸLD 532, An Act to lower Income Taxes for Middle Income Families in Maine; and,
• LD 570, An Act to Provide for Fairness in the Taxation of extraordinary and Unearned Income by Establishing a 3 Percent Surcharge on Net Capital Gains and Dividends Income Over $250,000 for Taxpayers Filing Single or Married Separate Returns and Over $500,000 for Taxpayers Filing Joint Returns.
  

The Joint Standing Committee on Taxation has scheduled the following work sessions for Thursday, March 18 beginning at 9:30 a.m.:

• ŸLD 498, An Act to Reauthorize a 3 Percent Tax on income Over $200,000 to Lift All Maine Workers out of Poverty; and,
  
• LD 501, An Act to Amend Maine’s Corporate Income Tax by Increasing the Top Rate from 8.93% to 12.4%.
  

These bills threaten to stifle Maine’s fragile economy.

• Increasing Maine’s corporate and individual income taxes will impact jobs and investments, and will ultimately shrink, not grow, Maine’s economy.  
  
• These bills punish success and those who work hard to achieve it.
• These proposals will hurt small businesses. In Maine, approximately 80% of businesses are established as LLCs, partnerships, or S-Corps. In those instances, the income from the business flows through to the individual taxpayer(s); therefore he or she is responsible for paying the income tax directly. These taxes will hit small businesses that have already been hit hard by the pandemic.
• The Legislature has consistently lowered the top individual income tax rates since 2011 – Maine cannot afford a step backwards!
• An analysis conducted in 2017 by the Office of Policy and Management concluded that a 3% surtax on incomes over $200,000 would have a negative impact on Maine’s economy, including reductions in employment, population, labor force, income levels, and economic output. The analysis showed that just three years after implementation the increased income tax rates would have resulted in a reduction to private employment of between 1,900 and 6,600 workers, a negative impact to real, disposable income by $270 million to $800 million, negative population impact of up to 3,800, and a negative economic impact of up to $320 million. These are real numbers that will devastate our economy and keep it from getting back on track after the pandemic.
• LD 530 will impact small business owners who try to sell their businesses. In order to avoid paying a whopping 3% surcharge on that gain above certain income thresholds, they can simply change residence before the sale, and Maine could lose the income tax from the sale, as well as any estate tax if those folks had planned to retire in Maine.
• LD 498 represents the public policy that is opposite to the stated goals of the State’s 10-year Strategic Plan, that is to grow Maine’s economy by increasing jobs, wages, and value of product.
• High-income tax rates impact businesses’ ability to recruit professionals to the state. Higher income earners are more mobile and can locate anywhere.

    Please contact your Representative and Senator today, and urge them to vote against corporate and individual income tax increases. If you have further questions, please contact Linda Caprara, senior government relations specialist for the Maine State Chamber of Commerce, by emailing her or calling (207) 623-4568, ext. 106.