State & Local Tax Burden
Tax burden remains above average
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
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.
Since 2010, Maine’s state and local tax burden has remained at or below 12%, above the New England and U.S. averages. This figure does not account for sales and property taxes paid by out-of-state visitors and secondhome owners. From 2019 to 2020, Maine’s tax burden fell 0.5% to 11.7%. The New England and U.S. rates fell, too. This is likely due to the economic slowdown caused by COVID reducing income and sales tax revenues. Maine ranks 4th highest of the 50 states in state and local taxes as a percentage of income and 11th highest 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 2020 (1 is highest)
U.S. Census Bureau and U.S. Bureau of Economic Analysis