Add Maine LD 229 income tax bracket expansion (3 → 5 brackets)

[PavelMakarchuk]

Maine LD 229 — Income Tax Bracket Restructuring

Bill: LD 229 (HP 152)
Status: Passed both chambers (as amended by Committee Amendment C-A, H-649). Governor may veto.
Effective: Tax years beginning January 1, 2026
Statute: 36 MRSA §5111

What it does

Expands Maine's income tax from 3 brackets to 5 brackets for all filing statuses. Lowers the bottom rate from 5.8% → 5.5% and adds two new top brackets at 7.75% and 8.95%.

Why this requires a policyengine-us change

Maine currently has 3 bracket slots in PE parameters (gov.states.me.tax.income.main.{single,joint,head_of_household}). The bill adds brackets 4 and 5, which don't exist as parameters. Without adding these slots, the bill cannot be modeled as a reform in the state legislative tracker.

Exact bracket structure (from Committee Amendment C-A)

Single / Married Filing Separate (§5111 sub-§1-G):

Bracket	Threshold	Rate
0	$0	5.5%
1	$27,450	6.75%
2	$64,950	7.15%
3	$144,500	7.75%
4	$500,000	8.95%

Head of Household (§5111 sub-§2-G):

Bracket	Threshold	Rate
0	$0	5.5%
1	$41,150	6.75%
2	$97,450	7.15%
3	$216,750	7.75%
4	$750,000	8.95%

Married Filing Jointly / Surviving Spouse (§5111 sub-§3-G):

Bracket	Threshold	Rate
0	$0	5.5%
1	$54,900	6.75%
2	$129,900	7.15%
3	$289,000	7.75%
4	$1,000,000	8.95%

Current baseline (§5111 sub-§1-F, 2-F, 3-F — 3 brackets)

Single (2025 COLA-adjusted values in PE):

• $0: 5.8%, $26,800: 6.75%, $63,450: 7.15%

Head of Household:

• $0: 5.8%, ~$40,200: 6.75%, ~$95,200: 7.15%

Joint:

• $0: 5.8%, ~$53,600: 6.75%, ~$127,000: 7.15%

Required changes in policyengine-us

1. Add bracket [3] and [4] (threshold + rate) to each of:

   • gov/states/me/tax/income/main/single.yaml
   • gov/states/me/tax/income/main/head_of_household.yaml
   • gov/states/me/tax/income/main/joint.yaml
   • gov/states/me/tax/income/main/separate.yaml (same as single)
   • gov/states/me/tax/income/main/surviving_spouse.yaml (same as joint)

2. The new brackets should have 2026-01-01 effective dates with the thresholds listed above.

3. The existing 3 brackets need their 2026 values updated:

   • Bracket 0 rate: 5.8% → 5.5% (for 2026+)
   • Bracket thresholds: updated per the tables above (for 2026+)

4. Brackets are indexed to Chained CPI per §5403 (same uprating as current brackets, base year changed from 2024 → 2025).

Important notes

• The introduced bill (HP 152, item 1) had 6 brackets with different rates (7.52%, 7.15%, 8.2%). The Committee Amendment C-A (H-649) replaced all bracket sections and is the version that passed. Use the amendment, not the original.
• Bill text sources:
  • Introduced bill PDF
  • Committee Amendment C-A PDF
• Governor Mills has opposed similar legislation previously — may be vetoed.

Context

This is needed to model LD 229 in the state legislative tracker. The bill has passed both chambers and is one of the highest-priority unanalyzed bills.