GOP state senator Saviello proposes raising taxes for households earning at least $250,000

AUGUSTA — Sen. Tom Saviello, R-Wilton, has submitted legislation that would tax Maine households’ earned income that exceeds $250,000 at 8.5 percent, the top state income tax rate before Jan. 1, when tax cuts enacted by the GOP-led 125th Legislature reduced the top rate to 7.95 percent. The higher tax only would apply to the portion of a household’s earned income in excess of $250,000.

Rep. Thomas Saviello

Republicans touted a reduction in income tax rates as a signature achievement of the 125th Legislature, in which the GOP held majorities in the Maine Senate and House. But Saviello, who is serving his second term as District 18 senator after eight years representing House District 90, told the Bangor Daily News on Tuesday that constituents questioned him about extending the tax break to Maine’s wealthiest residents.

“As I talked to many of my people, they said they could understand lowering the tax rate for working people and changing the estate tax, because that affects farmers and families,” but they didn’t understand the need to give high-earners a tax break, he said.

The legislation has yet to be assigned a legislative document number, according to Saviello. It would focus exclusively on households with earned income and would not apply to small businesses or investment income.

Saviello said a Maine Revenue Services official told him that such an income tax rate increase likely would affect 300 people and generate $5 million annually in additional state tax collections. The Republican senator said he’s optimistic about the proposal’s chances for passage and has approached Senate Majority Leader Seth Goodall, D-Richmond, to co-sponsor the legislation. Goodall served as the lead Democrat on the Environment and Natural Resources Committee, of which Saviello was chairman during the 125th Legislature.

Saviello said he has not discussed his plan with Republican Gov. Paul LePage, who regularly touts the income tax rate cuts as a step toward improving Maine’s business climate. Saviello said he first considered proposing the change shortly after winning re-election in November 2012.

“I’m trying to make it palatable for others of my party to be comfortable” with bipartisan cooperation to deal with state government’s fiscal woes, said Saviello, who originally was elected to the House as a Democrat, but left the party in 2005. “If I were in that kind of tax bracket, I think I should pay more. It seems like the right thing to do.”

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Comments

PAUL ST JEAN's picture

He may call himself a

He may call himself a republican, but he's still nothing more than a tax-the-rich liberal.

WOW

Refreshing to see a Rep. doing something other than taking care of his own..yes we can all work together if people just have an open mind and listen to the other side once in a while...

PAUL ST JEAN's picture

As long as we overtax the

As long as we overtax the rich, life is good, right, Linda?

Jennifer Mayo's picture

I think they could of come up

I think they could of come up with a better pic, this looks like a mug shot.

PAUL ST JEAN's picture

How do we know it isn't?

How do we know it isn't?

Jeff Johnson's picture

Flat Tax

Would someone please try to explain logically why we're not trying to move toward a flat tax?

I get the fact that someone who makes $250,000 a year has more 'disposable' income than someone making $30,000, but why should a higher income earner pay a higher percentage of taxes?

Does a person making $250,000 a year work less hard than someone making $50,000? Do higher income earners use more social services? Should they be financially penalized for the determination, education, expertise and professionalism it takes to get to that level of salary?

It makes the most sense to me to impose some simple flat taxes:
1. Everyone's income gets taxed the same federally. (for kicks and giggles, let's call it 17%
2. States can set their own income tax, level for everyone in that state.
3. The federal government institutes a spending tax. You get taxed a percentage of every dollar that you spend. Let's call that 5%.
4. States set their own sales tax.

We can then hammer out spending tax premiums, or luxury taxes... but leave the income taxes the same. Those with a higher income, pay higher taxes based on money use.

I'm thinking this will simplify tax laws considerably if it's kept simple.

PAUL ST JEAN's picture

It'll never fly, Jeff,

It'll never fly, Jeff, because it makes too much sense at both the state and federal levels. As you say, it's simple; too simple. Unless there are 4000 pages of tax law into which politicians can stuff as many lies as they can fit in, they want no part of it.

Bob Berry's picture

Agreed, but maybe...

Good comment. Wealthy folks (the vast majority, btw, are first generation wealthy who worked their butts off for it) don't stuff their money into mattresses. They re-invest, they spend, they use the money. This feeds our economy. Flat tax is definitely the way to go.

Meanwhile, I'd rather see a shift in the taxing from income based to spending based. This will lessen the incentive to do business elsewhere and increase the revenue by those spending from away (both on a state to state level, and world wide). The trick is to get our government to increase spending taxes while actually decreasing income taxes proportionally. I kinda suspect that won't happen though...

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