Senate amends estate tax expansion
Augusta — The Maine Senate voted June 1 to scale back its expansion of the state's estate tax exemption.
The Senate had voted May 24 to increase the amount of an estate exempt from state taxes from the existing $1 million to $5 million.
On June 1, however, the Senate amended LD 1147 by limiting the exemption to $2 million.
The tax on estates worth more than $2 million and up to $5 million would be 8 percent. Estates valued at more than $5 million and up to $8 million would be taxed at 10 percent and estates worth more than $8 million would be taxed at 12 percent.
All three local Republican state senators, who had also voted for the original bill, voted for the scaling back of the exemption on June 1. Sens. Christopher Rector of Thomaston, A. David Trahan of Waldoboro, and Michael Thibodeau of Winterport voted for the amendment on June 1.
The Legislature's Taxation Committee had recommended approval of the bill, which is sponsored by Sen. Richard Woodbury, an un-enrolled legislator from Yarmouth.
The June 1 vote was 31-4.
The House has yet to vote on the measure.
Rector said last week that legislators have been repeatedly told from everyone in the financial community that wealthier citizens are moving their residences out of the state because of Maine's high estate tax. He said this loss means that the state loses those people's income taxes as well and that their money is not invested in Maine banks, which then do not have those funds to loan out to their communities.
Critics say it was unfair to reduce the tax burden for the wealthiest while cutting programs that serve low- and middle-income residents.