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While Delaware Raises Taxes and Hurts Growth

June 27, 2009

Maine has taken a different posture.

This month the Democratic legislature and Governor John Baldacci broke with Obamanomics and enacted a sweeping tax reform that is almost, but not quite, a flat tax. The new law junks the state’s graduated income tax structure with a top rate of 8.5 percent and replaces it with a simple 6.5 percent flat rate tax on almost everyone, says the Journal:

  • Those with earnings above $250,000 will pay a surtax rate of 0.35 percent, for a 6.85 percent rate.
  • Maine’s tax rate will fall to 20th from seventh highest among the states.
  • To offset the lower rates and a larger family deduction, the plan cuts the state budget by some $300 million to $5.8 billion, closes tax loopholes and expands the 5 percent state sales tax to services that have been exempt, such as ski lift tickets.


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