State & Local Tax Burden

+0.9

Maine's tax burden remains above the U.S. and New England averages.

No significant movement since the last available data

Benchmark: Maine’s tax burden will decline and move toward the New England average each year through 2030.

Overview Fig. A Fig. B

Overview

The percentage of total personal income paid in state and local taxes (property, sales, income, corporate, motor vehicle, and other taxes) is our tax burden measure. While taxes impose costs on individuals and businesses, they generate revenue for public services and investments. This measure compares tax levels and ability to pay; it can be reduced by lowering tax rates and by increasing income.

State and local tax burden in Maine appeared to increase from 11.4% in 2018 to 12.3% in 2019. However, this change should be interpreted cautiously, as it is driven by a Census Bureau estimate of property tax collections increasing 22% in 2019. Furthermore, this figure does not account for the percentage of sales and property taxes paid by out-of-state visitors and second-home owners. The New England average was 10.3% in 2019. Maine ranks 4th highest of the 50 states in state and local taxes as a percentage of income. Maine ranks 12th highest among the states in tax collections per capita.

Fig. A

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State and Local Taxes as a Percent of Income

U.S. Census Bureau and U.S. Bureau of Economic Analysis

Fig. B

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State and Local Tax Burden Rank 2018 (1 is highest)

U.S. Census Bureau and U.S. Bureau of Economic Analysis