In addition to voting “ought-not-to-pass” on LD 1647, the Taxation committee also gave the same disposition on another carryover bill, LD 903, An Act to Improve Corporate Tax Fairness by Amending the Rates Imposed on Corporate Income, which was sponsored by Rep. Scott Cuddy (D-Winterport). The Maine State Chamber opposed the bill last session.
LD 903 would have established two new tax brackets and three new rates for corporate income tax. The bill would have increased the tax on corporate income between $2 to $3 million from 8.33% to 8.5% and on corporate income between $3 to $3.5 million from 8.33% to 8.75%. In addition, raising the top rate to 9% from 8.93% on income of $3.5 million or above. It would have made Maine one of only seven states in the nation to have corporate income tax rates 9% or above. According to the Tax Foundation, Maine’s current top corporate income tax is already higher than the top rate in our neighboring states of Connecticut, New Hampshire, Vermont, Rhode Island, and Massachusetts.
Caprara testified that raising the corporate income tax would make Maine less attractive, less competitive, and would impact future investments here. Paying higher taxes can impact the amount the business owner chooses to reinvest in their businesses in terms of capital and personnel, and failure to reinvest can have a direct impact on growing the economy and job creation.
Caprara added that, according to the Tax Foundation, “Economic evidence suggests that corporate income taxes are the most harmful type of tax and that workers bear a portion of the burden. Reducing the corporate income tax will benefit workers as new investments boost productivity and lead to wage growth.”
If you have any questions, please contact Linda Caprara by calling (207) 623-4568, ext. 106, or by emailing email@example.com.