Maine’s taxes a product of politics
    
  

By Stephen L. Bowen

Special to The Midcoast Review

Editor’s note: Stephen Bowen’s commentary in our April issue ("Ever wonder WHY Maine ranks 48th in the nation when it comes to being business-friendly?") documenting his in-person observations of Maine’s lawmakers in action, generated more reader response than any single article we have published to date.

Since that time, Bowen has become a candidate for the District 63 House seat representing Camden and Rockport. Mindful that the tax situation and the budget negotiations to come are something our readers need to be watching, we present his latest observations.

As we watch the Solons of Augusta prepare to do battle over the impending budget mess, it should give us concern that there is a lot of discussion about "adjustments" to the tax code. The term broadening, for instance, has become a popular bit of wonkspeak, making it sound like we’re going to make Maine’s taxes better or stronger somehow, not just higher. But higher is where we are going, as unbelievable as that seems. There is simply an absolute lack of the political courage necessary to say no to any of Maine’s myriad special interests. Recent legislatures, full of novices by virtue of term limits and unbridled by a decade of tax windfalls, have spent us into a budgetary calamity that nearly defies comprehension: a one billion dollar shortfall in a state with a five billion dollar budget.

     

Our taxes feel high because they are. We simply pay more for the government services we receive than anyone else in the nation.


    

So, prepare for a tax increase. And prepare also for the hardy perennials in the way of excuses for our staggeringly high taxes. You’ve heard them all; we’re a big state, a poor state, a remote state, and so forth. High taxes, we are told, are our destiny by virtue of economics and geography. But are they? Hardly.

Fact #1: Maine really does have the highest combined state and local taxes in America. Despite claims by some that our low per capita income only makes our taxes feel higher, the fact remains that Mainers spend a higher percentage of the money they earn paying state and local taxes than citizens of any other state. The Washington-based Tax Foundation found that Mainers pay 12.8% of their income in state and local taxes, the highest percent of any state for the second year running. What does this mean in real-life terms?

The U.S. Census Bureau, in its "Statistical Abstract of The United States 2001," reports that a family of four living in Portland making $50,000 a year, pays $6,227 in state and local taxes, more than the same family would pay in any of the other 29 U.S. cities they surveyed. When income jumps to $75,000, the same family pays a whopping $10,319, over $2,000 more than the same family would pay in Boston and a stunning $3,300 more than the national average.

What about less wealthy families? The Census says that same family of four making only $25,000 still pays $2,800, second only to citizens of Philadelphia and still $800 above the national average. Our taxes feel high because they are. We simply pay more for the government services we receive than anyone else in the nation.

But what drives those high taxes? Is it our low incomes, as many claim? Not really.

Fact #2: We don’t pay high taxes because we are poor. This argument is probably the one most commonly put forth by our friends in Augusta to defend their unquenchable thirst for our money, but it is illogical and untrue. We are ranked 37th in per capita income, which means that there are 13 other states poorer than we are. By the logic of this argument, they should have high taxes as well, right? Wrong.

Not one of the states with lower per capita income than Maine pays more in state and local taxes than we do. According to the Census Bureau, if our family of four making $50,000 were living in Phoenix, Arizona, the next state lower than us in income, they would pay only $3,700 in taxes, almost half what the Portland family pays. They would pay $200 less than that if they lived in Albuquerque, New Mexico, the third poorest state. So if low incomes don’t explain our high taxes, what does? Geography? Nope.

Fact #3: We don’t pay high taxes because Maine is big and sparsely populated. You hear all the time that we’re a big, sparsely populated state, the fact of which makes it more expensive to provide government services. Setting aside for a moment that only with the myopic vision of an Augusta lawmaker could you look at a map of the U.S. and conclude that Maine is a big state, this argument holds no water either. Let’s take roads, for example. The Census reports that Maine has 22,664 miles of roads. At little over 20,000 miles, though, little tiny Connecticut has nearly that much all by itself, and Massachusetts has over 35,000 miles of roads. Surely it costs Maine less to maintain its roads than it costs Massachusetts to take care of its. "Yes," you’re saying, "but Massachusetts has a higher population to spread the costs around, what about how sparse our population is?"

Well, you want a big state, sparsely populated? How about Idaho, which has a similar climate and has almost exactly our same population spread over a state nearly three times bigger. Idaho is also 41st in per capita income, poorer than we are, but according to the Tax Foundation, its citizens pay only 10.4% of their income in state and local taxes. How about Montana? With 808,000 people, it has three quarters of our population spread over 147,000 square miles – four and a half times bigger than Maine – and it has 122,000 miles of roads. Despite all this, though, its people, who are ranked 46th in per capita income, pay only 9.9% of their income in state and local taxes, one of the lowest rates in the nation.

The Biggest Fact of All: Maine’s taxes are a product of politics, pure and simple. As the above evidence indicates, the old excuses don’t bear scrutiny. Levels of spending and taxation are decided by politicians and citizens, not by circumstance. Further evidence that geography is not taxation destiny can be found in our nearest neighbor, New Hampshire. According to the Tax Foundation, Mainers will work the equivalent of two full weeks, 14 days more than our New Hampshire brethren, just to pay taxes.

And are our friends next door suffering for their frugality? Hardly. New Hampshire has a higher per capita level of income, fewer people on food stamps, a lower crime rate, a lower poverty rate, and more people covered by health insurance. And all of this is accomplished with 3,600 fewer state employees. Is it any wonder that the Small Business Survival Committee rated New Hampshire the 7th most business-friendly state and Maine the 49th?

So, it is up to you to decide whether you can stand paying more of your money in taxes than anyone else in the nation and still have the state fall short and remain seemingly unable, even unwilling, to make the most basically sound economic decisions with all that money.

If you can’t, the election is approaching. Time to make your voice heard.

Stephen Bowen lives in Rockport and teaches in Camden. He is a candidate for the Maine House of Representatives representing both towns.

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