LD 1047: An Act to Impose an Additional Tax on Certain Unearned Income

Most working Mainers earn their income through wages. But the wealthiest individuals often make money in a different way – through unearned income from capital gains on investments.

Capital gains are income that comes from selling assets that have increased in value – things like vacation homes or other investment properties, high-value art, or stocks.

Today, our tax system treats this unearned income the same as wages, even though it’s not money earned through work. LD 1047 aims to fix that by adding a 4% surcharge on annual capital gains income over $250,000 for individuals and $500,000 for married couples.

The Legislature should go even further by creating a net investment income tax, which would apply not only to capital gains but also other types of investment income, including interest and dividends.