Trump is right about Democrats again.
Janet Mills is facing backlash after signing a controversial new tax increase into law that critics say could hurt small businesses, retirees, and job growth in Maine.
The newly approved measure places a 2% income tax surcharge on individuals earning more than $1 million and married couples earning more than $1.5 million. Starting January 1, 2026, Maine’s top marginal tax rate will jump from 7.15% to 9.15%.
Supporters claim the tax will generate about $160 million over the next two years and help fund government-backed programs such as free community college, housing assistance, childcare support, public schools, and health care services.
Governor Mills defended the move, saying it would help residents dealing with rising prices while expanding state programs. She also blamed economic pressure on policies connected to President Donald Trump.
However, business leaders and fiscal conservatives say the new law creates a serious economic risk for the state.
Small Businesses Could Feel the Pain
Former Maine lawmaker and business owner Brian Langley warned that many family-owned companies may suffer the most.
According to Langley, business owners who spend decades building local companies could face a heavy tax burden when they decide to sell, retire, or pass ownership to the next generation.
That could make it harder for longtime employers to cash out fairly after years of creating jobs and supporting their communities.
Chamber of Commerce Sounds Alarm
Maine State Chamber of Commerce also raised concerns, warning that higher taxes could reduce business investment, delay expansion plans, and limit hiring.
At a time when many Americans remain concerned about inflation, interest rates, and the overall economy, critics say Maine should be encouraging growth—not creating new financial burdens.
Maine Moves Against National Trend
Tax experts point out that many states have moved to lower taxes in recent years to attract workers, retirees, and employers.
The Tax Foundation reported that more than twenty states have reduced top income tax rates since 2021, while only a small number have moved in the opposite direction.
That means states with lower taxes may become even more attractive compared to places imposing new surcharges.
What Happens Next?
Maine now joins Massachusetts, New Jersey, and Washington in adopting millionaire tax-style policies.
Opponents say the long-term cost could be lost investment, slower job creation, and more residents looking elsewhere for opportunity.
For many voters, the issue is clear: when families are already watching every dollar, is now really the time for another tax hike?
