AUGUSTA — As expected, the Maine Senate killed a bill Wednesday to exempt 50 percent of capital-gains income subject to federal tax from Maine income tax.
Senators voted 21-14 to reject the bill, a day after the House voted 91-55. also in opposition.
Both votes moved only slightly from party lines. Sen. Patrick Flood, R-Winthrop, voted with Democrats, along with independent Richard Woodbury of Yarmouth, according to Ericka Dodge, Senate Democrats’ spokeswoman.
In the House on Tuesday, Rep. Eleanor Espling, R-New Gloucester, and Rep. Corey Wilson, R-Augusta, voted with Democrats to reject the bill.
The Republican-sponsored bill would cost nearly $191 million through 2017, also reducing municipal revenue sharing by nearly $2.5 million over that period, according to its fiscal note.
Rep. Richard Malaby, R-Hancock, the bill’s sponsor, said the fiscal note merely counted revenue lost, ignoring an uptick in capital gains investment he thinks would occur if taxes were lowered.
“When it comes to capital gains income tax, a lowering of the rate leads to an increase in activity,” Malaby said on the floor.
But Democrats, who won out, said it’s unlikely that the money lost would come close to equaling money gained, and tax breaks should be focused on low- and middle-income payers.