An Act To Provide Funding for Education by Restoring the 8.5 Percent Income Tax Rate for High-income Taxpayers
Sec. 1. 20-A MRSA §15752-A is enacted to read:
§ 15752-A. State funding for mandated legislative appropriations for kindergarten to grade 12 education
By June 30, 2014 and annually thereafter, the State Tax Assessor shall calculate the amount of revenue attributable to the income taxes paid by taxpayers who are taxed at the 8.5% rate under Title 36, section 5111, subsections 1-C, 2-C and 3-C and shall certify to the State Controller the amount of revenue attributable to the income tax paid by those taxpayers. The State Controller shall credit the amount of revenue attributable to the income tax paid by taxpayers who are taxed at the 8.5% rate under Title 36, section 5111, subsections 1-C, 2-C and 3-C to the department. That amount must be used to supplement and not to supplant funding for essential programs and services for kindergarten to grade 12 education under chapter 606-B.
Sec. 2. 36 MRSA §5111, sub-§1-C, as enacted by PL 2011, c. 380, Pt. N, §2 and affected by §19, is amended to read:
| If Maine Taxable income is: | The tax is: |
| At least $5,000 but less than $19,950 | 6.5% of the excess over $5,000 |
| $19,950 or more but less than $137,500 | $972 plus 7.95% of the excess over $19,950 |
| $137,500 or more | $10,317 plus 8.5% of the excess over $137,500 |
Sec. 3. 36 MRSA §5111, sub-§2-C, as enacted by PL 2011, c. 380, Pt. N, §4 and affected by §19, is amended to read:
| If Maine Taxable income is: | The tax is: |
| At least $7,500 but less than $29,900 | 6.5% of the excess over $7,500 |
| $29,900 or more but less than $206,250 | $1,456 plus 7.95% of the excess over $29,900 |
| $206,250 or more | $15,548 plus 8.5% of the excess over $206,250 |
Sec. 4. 36 MRSA §5111, sub-§3-C, as enacted by PL 2011, c. 380, Pt. N, §6 and affected by §19, is amended to read:
| If Maine Taxable income is: | The tax is: |
| At least $10,000 but less than $39,900 | 6.5% of the excess over $10,000 |
| $39,900 or more but less than $275,000 | $1,944 plus 7.95% of the excess over $39,900 |
| $275,000 or more | $20,634 plus 8.5% of the excess over $275,000 |
summary
This bill reinstates the 8.5% tax rate for high-income taxpayers and uses the funds to assist the State in providing at least 55% of the cost of the total allocation for kindergarten to grade 12 education from General Fund revenue sources. The higher tax rates apply to individuals filing married joint returns or surviving spouses who have Maine taxable income of $275,000 or more, heads of households who have Maine taxable income of $206,250 or more and single individuals and married persons filing separate returns who have Maine taxable income of $137,500 or more.