Fair Share Tax Plan

Use the income tax in Maine to ensure that

•The bottom 70% of income earners in Maine receive a substantial tax reduction of $500-1,200 a year.

•The wealthiest 10% in Maine have an overall effective tax rate on average just 5% more than the poorest Mainers do now.

This should raise the approximately $1.5 billion necessary to fund the Fair Share Economy, including:

•Directly creating 10,000 jobs

•Universal free pre-k

•Fully funding local schools

•Free tuition for the University of Maine and Community College systems.

•A robust clean elections system.

•Single Payer Health Care

•Maine State Bank

•Repairs the social safety net and reverses the cuts of the LePage administration

To do this

•Mainers at the bottom 20% would pay an overall effective tax rate of just 4.5%.

•Every decile above that would pay a rate 1.2 times higher.  For example, Mainers in the bottom 30-40% would pay an effective tax rate of just 5.1%.  There would be additional steps up at the 95-99% level and for the top 1%.

•Income tax filings would be the primary way of correcting imbalances in tax contributions.  Those paying too much of their income in property and sales taxes, for example, would receive circuit breaker style refunds.

Problem

•Low income Mainers have an overall effective tax rate nearly twice as high as the top 1%.  

•Although the top fifth of income earner make more than all other Mainers combine, their overall effective tax rate is essentially the same as everyone else.

•In addition to being unfair, our tax system simply is not structured to raise enough revenue to ensure Mainers get their fair share. 

Answers to Common Objections

•To be clear, this Fair Share Tax Plan does include a tax increase for upper income earners.  MPA believes that it's only fair for upper income earners to pay their share of the cost for good jobs, free education, and health care for all.  It makes much more sense for Maine to tackle these problems directly, rather than waiting for big corporations and the rich.

•In 1953, the top marginal tax rate was 92%.  We need to go back to the days when the rich paid their fair share.

Links to more information

•Historical information on the top marginal tax rate:  http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=213

•Maine Revenue Services Report on 2009 tax fairness:  http://www.maine.gov/legis/ofpr/taxation_committee/interim_schedule/MRS_...