Tax reforms credited with ensuring Maine's poorest no longer pay highest tax rate
The poorest 20 percent of Maine households will no longer pay disproportionately more in taxes than the richest one percent beginning in 2020, according to a new report from the Maine Center for Economic Policy (MECEP), which credits the passage of three tax reforms this past legislative session for the change.
Under Maine’s current tax code, the top one percent of households pay into state and local taxes an average effective tax rate of 8.6 percent of their yearly income. That is lower than the bottom 20 percent, which pay 8.7 percent, and well below the middle 20 percent, which pay 9.6 percent.
Beginning in 2020, however, the effective tax rate for the bottom 20 percent of Maine households will drop from 8.7 to 7.7 percent, while the rate for the richest one percent in the state will remain at 8.6.
According to MECEP policy analyst Sarah Austin, who authored the report, the change can be attributed to the Maine Legislature’s passage of an expanded Maine Earned Income Tax Credit, or EITC, which provides a tax break for low income families. Austin also said the larger refundable property tax credits for homeowners and renters with low incomes as well as the increase in the Homestead Exemption, which lowered property taxes owed by Mainers for their primary residences, with contributing to the change
Read more: https://mainebeacon.com/tax-reforms-credited-with-ensuring-maines-poorest-no-longer-pay-highest-tax-rate/
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