Maine Against the Grain
The Wall Street Journal reports that tax reform is coming from an unexpected place: Maine. A new law rids the state of its progressive tax system, which carried a top rate of 8.5 percent, to be replaced with a 6.5 percent rate applying to just about everyone. Those making above $250,000 will still have to pay slightly more—6.85 percent.
As a result, Maine, previously ranked seventh on the list of highest taxed states, will drop to 20th. Democratic Governor John Baldacci said of the new tax legislation:
We're definitely going against the grain here. We hope these lower tax rates will encourage and reward work, and that the lower capital gains tax brings more investment into the state.
Hopefully Maine's neighboring northeastern states will soon follow suit.
