While the idea of a special tax on millionaires is hotly debated across the country, Maine state Rep. Cheryl Golek characterized her state’s new tax as a modest and reasonable step toward fairness.
That’s because, she said, working- and middle-class households in Maine — including teachers, firefighters and nurses — are paying effective state income tax rates similar to or higher than those of the highest earners.
“Those who benefit the most from our economy do so because of the people, infrastructure and communities that support that success,” said Golek, a Democrat. “Asking for a small additional contribution from the wealthiest in our state is a reasonable and widely supported step toward a fairer system.”
The legislation signed by Democratic Gov. Janet Mills this month will add a 2% tax to households whose income exceeds $1 million per year.
Maine and Washington, which enacted its own law last month, are among the latest Democratic-led states to ask for more tax dollars from the rich as national wealth inequality widens and states face heightened budget pressures. They follow the lead of other states including New Jersey and Massachusetts that have implemented specific taxes for the rich.
The idea is gaining traction as lawmakers in at least a dozen states, including Illinois, Minnesota, Rhode Island and Virginia, have proposed new taxes for the wealthiest taxpayers. In California, advocates this week announced they gathered enough signatures for a ballot initiative that would impose a one-time tax on billionaires. But these proposals often stir yearslong battles.
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“There’s no real evidence of millionaire out-migration. I’m sure there’s some isolated anecdotes, but the actual data don’t show it,” said Phineas Baxandall, director of research and policy analysis at the left-leaning Massachusetts Budget and Policy Center.
He said one piece of evidence that the wealthy remain in Massachusetts are the proceeds of the tax itself, which are funding major priorities including free community college and expanding childcare subsidies for thousands.
“Massachusetts is rightfully fearful of the federal cuts that are happening,” Baxandall said, “but we’ve been able to still move forward with real, transformational investments.”
