March 21, 2013

Majority Leader Rep. Seth Berry has proposed a bill for tax fairness in Maine that would mirror the Buffet Rule. photo by Ramona du Houx

“This bill seeks to make our tax code fairer by correcting an imbalance that puts too much of the burden on lower- and middle-income Maine people,” said Berry. “People making more than $250,000 a year can afford to pay at least as much per dollar as those making $48,000.”

Taxation rates for the state’s highest-income households would come into alignment with the rates paid by all other Mainers under a measure proposed today by House Majority Leader Seth Berry of Bowdoinham.

Berry’s measure, LD 1113, “An Act To Provide Tax Fairness for Maine’s Middle Class and Working Families,” follows the same philosophy as the federal Buffet Rule: that everyone should pay their fair share. Under Berry’s bill, Mainers with annual incomes of at least $250,000 would pay at least the same effective rate in state and local taxes as the average paid by all other taxpayers.

Meanwhile Governor Paul LePage is raising taxes in order to pay for his income tax cuts, passed in 2011. LePage’s $6.2 billion two-year budget proposal cuts off all revenue sharing with municipalities and reins in two of the state’s main property tax relief programs, the Circuit Breaker refund and Homestead Property Tax Exemption. The proposal also ends the Business Equipment Tax Refund program, which reimburses businesses for equipment they purchase, and requires school districts to pay a much larger share of their teacher retirement benefits, and eliminates state revenue sharing.

How the LePage administration has outlined his objectives in this budget proposal amounts to over $400 million in a tax shift- or tax increase- to communities across the state because he can’t pay for his tax cuts enacted by the Republican controlled 125th Legislature. Revenues from Berry’s measure. estimated at $200 million in the first biennium, would fill half the budget gap created by new tax cuts largely benefiting the wealthy.

“It is only fair that what we ask of a hard-working, minimum-wage mother, we also ask of a millionaire,” said Rep. Adam Goode of Bangor, another bill co-sponsor and House chairman of the Taxation Committee.

According to the most recent data available from Maine Revenue Services, the highest-income households currently pay an average overall state and local tax rate of roughly 10 cents per dollar. By comparison, the average Maine household pays slightly more than 11 cents.

On average, Berry’s Buffet Rule would require just one penny more per dollar from those making $250,000 and above.

Starting in 2016, Berry’s Buffet Rule would fund tax reductions for all working and middle class families.

The bill’s co-sponsors included Rep. Joseph Brooks, an independent from Winterport.

According to Maine Revenue Services, a single parent with two children, working full-time at minimum wage, currently pays almost twice as much per dollar in state and local taxes as someone making $1 million per year.

The bill takes a comprehensive look at Maine’s tax structure by considering the impact of income, sales and property taxes on Maine households. Rather than focusing on isolated aspects of the tax code, the bill seeks an accurate assessment of the tax burden to ensure a fair and equal tax treatment across all income levels.

The bill is expected to be referred today to the Taxation Committee, which will hold a public hearing before making a recommendation to the full Legislature.

One of the many co-sponsors of the bill included Rep. Joseph Brooks, an independent from Winterport.