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An Act To Provide Income Tax Relief
Be it enacted by the People of the State of Maine as follows:
Sec. 1. 36 MRSA §5111, sub-§1-B, as enacted by PL 1999, c. 731, Pt. T, §3, is amended to read:
 
1-B. Single individuals and married persons filing separate returns; tax years beginning 2002 to 2012.   For tax years beginning on or after January 1, 2002 and before January 1, 2013, for single individuals and married persons filing separate returns:
Sec. 2. 36 MRSA §5111, sub-§2-B, as enacted by PL 1999, c. 731, Pt. T, §5, is amended to read:
 
2-B. Heads of households; tax years beginning 2002 to 2012.   For tax years beginning on or after January 1, 2002 and before January 1, 2013, for unmarried individuals or legally separated individuals who qualify as heads of households:
Sec. 3. 36 MRSA §5111, sub-§3-B, as enacted by PL 1999, c. 731, Pt. T, §7, is amended to read:
 
3-B. Individuals filing married joint return or surviving spouses; tax years beginning 2002 to 2012.   For tax years beginning on or after January 1, 2002 and before January 1, 2013, for individuals filing married joint returns or surviving spouses permitted to file a joint return:
Sec. 4.  36 MRSA §5111, sub-§6  is enacted to read:
 
6.  Balancing of tax brackets.     For tax years beginning on or after January 1, 2013, taxes assessed under this section are calculated using income tax bracket thresholds calculated under this subsection.
 
A.  By September 1, 2012 and every 5 years thereafter, the assessor shall calculate income tax bracket thresholds for single persons and married persons filing separately, married persons filing jointly and surviving spouses and heads of household that result in the balancing of individual income taxes so that the following percentages of tax filers pay the following top marginal tax rates:
 
B.  The income tax bracket thresholds calculated under paragraph A apply to tax years beginning on or after the January 1st following the determination of the new bracket thresholds.
 
C.  The assessor shall submit a report to the joint standing committee of the Legislature having jurisdiction over taxation matters by the September 15th of the year of calculation containing the new income tax bracket thresholds, describing the method used to make the calculation and the bracket threshold amounts and estimating the impact of the new rates on individual income tax revenues.
 
SUMMARY
This bill reforms the Maine income tax by establishing a rate structure that includes 6 income tax bracket thresholds with top marginal tax rates from 0% to 10%. The income thresholds for each rate would be calculated by the State Tax Assessor every 5 years to maintain the same level of progressivity of the tax by maintaining the same percentage of taxpayers in each top marginal rate category.