Public hearing for taxation items in governors budget

Public hearings on the major tax initiatives in LD 390, the governor’s biennial budget, concluded today with presentation and testimony on the following items:

  • Sales tax expansion
  • Income tax changes,
  • Service provider tax, and
  • Estate tax

 

Commissioner Rosen described Question 2 as a “double cross” of the legislature, presumably by the voters.

The committees then heard 70 people testify. Some, including business leaders, supported the governor’s proposed delay of the 3% surcharge from Question 2. In some cases those same businesses oppose the governor’s plan to expand the sales tax to certain services and increase the lodging tax to 10%. Large numbers of teachers, retirees and other citizens turned out to oppose the governor’s changes.

Below is a brief history of Maine’s recent income tax rates and the governor’s fully implemented proposal.

 

Income tax changes since 2011

Status in 2010

< $4,950 = 2.0%

>$4,950-$9,850 = 4.5%

>$9,850-$19,750 = 7.0%

$19,750 or more = 8.5%

Personal exemption $2,850

Standard deduction for married filing jointly  $9,550

2011 changes

< $4,950= 0.0%

>$4,950-$9,850 $9,850 = 6.5%

>$9,850-$19,750 = 6.5%

$19,750 or more = 7.95%

Conform to federal personal exemption amount $3,900

Conform to federal standard deduction for married filing jointly $11,900

2015 changes

$0 ‐ $21,400 =5.8%

$21,401 ‐ $50,000 = 6.75%

$50,001-infinity = 7.15%

Standard deduction for single from $6,100 to $11,600 married filing jointly to $23,200

(Phase out from $70,000 ‐ $140,000)

Proposed 2017 changes

Voter approved 3% on incomes over $200,000

x$0-infinity 2.75% PLUS 3%

Public testimony from Tuesday, covering changes to the BETR and BETE programs can be found here.

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