AUGUSTA — Rural Democrats joined with Republicans in the Maine House on Monday to reject a bill to increase the state’s estate tax.

The bill, which was approved on party lines by the Legislature’s Taxation Committee last week, would have lowered the amount of an inheritance excluded from taxation from $5.6 million to $2 million. The measure was defeated on a 70-75 bipartisan vote.

While supporters of the bill argued that few Mainers would ever inherit more than $2 million or even earn that much in the course of their lives, opponents said there were many family farms or small businesses that are worth $2 million or more and the state risked driving those employers from the state.

The bill would have reversed a reduction in the estate tax approved in 2015. Rep. Bruce Bickford, R-Auburn, said that beyond hurting small businesses, passing the change would have signaled instability in the state’s tax code, which would prompt retiring Mainers to consider changing their residence.

Under former Republican Gov. Paul LePage, Maine increased the estate tax exemption to keep pace with the federal amount until the Republican-led Congress and President Trump doubled the exemption to more than $11 million in 2018 as part of the tax-cut package.

State tax officials have estimated that lowering the exemption to $2 million on average would generate about $28.5 million in revenue each year. The current $5.6 million exemption generated $13.8 million for the state in 2018.

The bill faces additional votes in the Senate.

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