MAINE MILLIONAIRE TAX

What the millionaire tax means for Maine

When a state asks its wealthiest residents to contribute a little more, it means a renter who falls behind on payments due to rising costs has stronger eviction protections. It means a family can afford child care. It means a nurse’s aide can finally make ends meet. It means a kid in a small town who never thought college was in the cards gets to go, debt-free.

That’s exactly what Maine has done with its new millionaire tax.

Mainers for Tax Fairness Tax Day Rally at the Maine State Capitol | April 15, 2025

Maine’s tax code has long been upside down, with middle-income families paying a higher effective tax rate than the wealthiest 1%. We’ve been asking the most of those with the least. This landmark legislation begins to fix that.

Maine also faces a $174 million budget gap driven mostly by federal cost shifts. The millionaire tax is the responsible thing to do. Other states have already done this. Massachusetts passed a 4% millionaire tax in 2022. It raised nearly twice what was projected and the number of millionaires in the state grew by 38.6% afterward. And, Massachusetts had the highest GDP growth of any state in 2025.

Maine millionaire tax at a glance:

  • Applies a 2% surcharge on income above $1 million
  • Affects roughly 2,600 tax filers, or 0.4% of Maine tax payers
  • Generates $96 million in the first year alone and $150 million in the following biennium

While the funding generated by the millionaire tax isn’t earmarked for any specific item, here are some things that additional money could make possible:

  • $12 million per year to increase the property tax fairness credit for homeowners and renters 
  • $10 million per year for child care assistance for working families 
  • $20 million per year to boost pay for care workers looking after older adults and people with disabilities 
  • $12.5 million per year for tuition-free community college 
  • $7.5 million per year to help  households with low income pay their electricity bills 
  • $6 million per year to raise rural teacher salaries to a $50,000 minimum 
  • $11 million one-time to keep families from losing their homes to eviction 
  • $6 million to keep family planning clinics open for uninsured Mainers across the state
  • $14 million per year to comply with new federal mandates for SNAP and MaineCare

The victory of the millionaire tax in 2026 follows other tax fairness wins in 2025, both signed into law as part of the budget.

“An Act to Invest in Maine’s Families and Workforce by Amending the Real Estate Transfer Tax” created a graduated real estate transfer tax by raising the rate on property sales over $1 million. It increases the tax to $5 per $500 of sale price and exempts first-time homebuyers using the Maine State Housing Authority’s loan program from the tax.

“An Act to Expand the Dependent Exemption Tax Credit” doubles Maine’s child tax credit for young kids, targeting support to families with low and middle income to help Maine families afford basics, cut child poverty, and strengthen the economy. This change to the credit pays for itself by phasing out the benefit for Maine’s highest earners who need the support less.