The budget plan now includes a “millionaire’s tax.”
It’s an income tax surcharge of 2% on wealthy Mainers, specifically on the portion of a resident’s taxable income beyond $1 million for single filers, $1.5 million for heads of households and $1.5 million for people filing jointly. The tax is expected to impact 2,631 tax returns and generate $150 million in the next biennium.
This idea was originally proposed in a separate bill, LD 1089, which is currently tabled in the House.
Notably, the Mills administration testified against that bill, following a pattern of the governor consistently opposing income tax increases throughout her two terms.
However, unlike that bill, which would have revenue generated to public K-12 education, revenue would now go to the state’s general fund without a specific dedicated use.
In a statement after the vote, the governor said she supported the plan, explaining that she believes it is “crucial” that the state maintain investments in health care, education, and local communities, “especially as we face such economic uncertainty because of actions of the Trump Administration.”