A man wears a pin that reads “I’m Rich, I Can Afford To Pay My Taxes” during a Tax Day protest on April 15, 2017 in Cambridge, Massachusetts. (Photo by Scott Eisen/Getty Images)
For the first time in several years, Maine is dealing with a budget deficit and will be forced to make some tough decisions to close the projected $450 million gap.
One idea that seems like a no-brainer but appears to be off the table for Gov. Janet Mills and legislative Republicans: taxing the wealthiest a little bit more.
As things stand, any individual making more than $61,600 is taxed $3,911 plus 7.15% of excess over that amount. Couples filing jointly making $123,250 or more are taxed $7,825 plus 7.15% of excess. That means that someone making less than the state’s median household income is taxed at the very same rate as the wealthiest person in Maine.
Carving out an additional tax bracket for those at the very top of the pay scale would bring in much-needed revenue. And let’s be clear, the millionaires are doing just fine.
On the federal level, we know that the Trump administration, with congressional support, is going to extend (if not expand) his signature tax cuts, which specifically benefit corporations and the wealthy. We know he’s going to let Wall Street run wild. We know his billionaire pals are going to continue to thrive while Congress slashes funding for health care, education, and environmental initiatives among many others. (Here’s a list of ideas they are discussing to pay for the tax cuts and immigration crackdown).
These cuts are sure to trickle down to Maine, putting a greater burden on the state budget in order for it to continue to provide these essential services.
If the state doubles down and focuses its cuts on programs that will most impact Mainers with lower incomes, it could be devastating. Rather, we should be counteracting these measures by asking those at the tippy top to pay a little more.
Mills’ budget proposal does raise taxes but in ways that are regressive, like the $1 increase in the cigarette tax, which will be felt more by those who make $300 a week than those who make $3,000. Republican leaders have said flat out that they won’t agree to a budget that raises taxes at all — even for the wealthiest.
Last year, the governor vetoed a bill (introduced by a Republican and passed with bipartisan support) to create three new income tax brackets with higher rates for wealthier residents. In her veto message, she argued the process behind the bill was not transparent and said it would not deliver meaningful relief for the lowest income Mainers.
But in addition to relief, the state sorely needs revenue.
During her budget address this week, the governor spoke directly to those calling to “tax the rich,” saying doing so would disrupt the “stability and predictability” that “entrepreneurs and investors looking at Maine” depend on.
“Changing our income or sales taxes in order to raise revenue would discourage investments we very much need to keep our economy on track,” she said. “Investors are looking for a stable fiscal climate and they in turn will bring good, high-paying jobs, raising the standard of living, and growing the economy.”
However, this threat of financial ruin came after she herself touted the strength of Maine’s economic growth (“outpacing the national average, including the rest of New England”) with more than 17,800 new businesses opening in the state last year.
She also acknowledged, “While not everyone is feeling it, our economy is strong.”
That sounds to me like an argument to spread it around a little bit more.
If the governor is concerned about going back on her 2022 pledge not to raise taxes or fears Republicans will use it as a campaign talking point, why not let them own it? Let theirs be the party that cuts services to protect millionaires’ earnings.
Many within the Democratic Party say it needs to position itself as the party of working people, not the elite. Raising taxes on the richest people in the state in order to preserve health care coverage for the poorest, or give caregivers a raise, or expand access to child care would probably go over well with the vast majority of voters.
Isn’t that an idea worthy of consideration?
YOU MAKE OUR WORK POSSIBLE.