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Income tax relief proposal wins initial approval in Maine legislature

The State House is seen at sunrise during the final week of winter, Thursday, March 16, 2023, in Augusta, Maine.
Robert F. Bukaty
/
AP
The State House is seen at sunrise during the final week of winter, Thursday, March 16, 2023, in Augusta, Maine.

A bill that aims to provide tax relief to lower and middle income earners in Maine has passed both the Maine House and Senate.

Supporters of the Democratic-sponsored bill say it would modernize Maine's tax structure by adding two new brackets at the top and lowering rates on the middle and lower end.

Just before a vote in the Senate Thursday, Democratic Senator Nicole Grohoski said under Maine's current structure, some middle income earners pay the same tax rate as those who earn 10 times as much or more.

"That's not how fairness works," Grohoski said. "And it's why our tax code is upside down, asking more, proportionally, from the middle, than from the wealthiest."

But some Senate Republicans say that raising taxes on high earners will drive them out of the state.

The Mills administration testified against the bill in committee, comparing it to a similar bill that the Governor vetoed last year because she said it didn't provide meaningful tax relief. The administration also noted that Maine's top income tax rate is among the highest in the country.

The proposal faces additional votes in the legislature.