AUGUSTA, Maine — A bill that would levy an assessment on the top 1 percent of Maine taxpayers and send much of the revenue raised to towns and cities in the form of municipal revenue sharing won passage in the Maine House on Wednesday night but was later killed in the Senate.
The bill, which was branded as Maine’s “Buffett Rule” in a reference to billionaire investor Warren Buffett, passed largely along party lines in an 87-48 House vote before it was killed in the Senate early Thursday morning.
The bill, LD 1113, would levy an assessment on Maine residents earning more than $250,000 if their effective tax rate — the percentage of their income they pay in sales, income and property taxes — is lower than the average effective tax rate paid by the bottom 99 percent of Maine taxpayers.
Those assessments — estimated to be about $35 million annually — would be used to restore municipal revenue sharing to its current levels. While the two-year state budget passed earlier this month by state lawmakers would restore some of the revenue-sharing funds that LePage proposed to eliminate, the amount restored would still fall short of current levels.
Maine residents “would like to know we’re looking under all rocks, trying to look for solutions to revenue sharing,” said Rep. Jeff McCabe of Skowhegan, the assistant House Democratic leader.
The bill was a major priority of House Democratic Leader Seth Berry of Bowdoinham, who labeled the bill a tax fairness measure.
The bill’s original intent was to pass into law a provision that would make sure Maine’s highest-income taxpayers didn’t pay lower effective tax rates than the state’s lower-income residents.
Republican House members on Wednesday night questioned whether that was still the intent, or whether it was to raise funds to restore revenue sharing.