The bill passed 11-2 through the Legislature’s Taxation Committee. It will go through both chambers for consideration. It must pass by a simple majority and, if approved, would go into effect 90 days after the governor signs it.

What it does:

• Creates a 6 percent flat income tax rate, then provides a series of tax credits to middle- and low-income people.

• Repeals the Alternative Minimum Tax.

• Increases state reimbursement for property taxes and allows municipalities to opt in or out of unreimbursed portions.

• Expands the circuit-breaker refund program and doubles the state’s contribution to the Homestead Exemption.

• Overall, cuts taxes by more than $150 million to Maine businesses and residents, and drops Maine’s income tax from the seventh highest to 34th highest in the nation.

How the cuts will be made up:

• This plan removes some exemptions, imposes sales tax on some services, increases the real estate transfer tax, increases the excise tax on wine and beer, and increases the meals and lodging tax.

Who will benefit:

• Rep. John Piotti, D-Unity and House chairman of the Taxation Committee, said 96 percent of Mainers will see a significant income tax reduction, and 90 percent will see an overall tax reduction.

Who will not benefit:

• Piotti said a select few in unique situations, most in high-income brackets, will see an overall increase in taxes. These are people who use a lot of services and itemize lots of things on their tax returns, “really odd ball situations,” Piotti said.

Source: Rep. John Piotti, Legislature’s Taxation Committee

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