Wednesday, April 16, 2014
... by ending government overspending.
During a snow storm a few weeks ago, I stopped at a convenience store to pick up some cereal and milk. The cashier and I struck up a conversation. She had moved to Maine from Tennessee twenty years ago. I asked what’s the toughest thing for her about living in Maine, expecting it to be the weather.
“I just wish that I could keep a little more of my money. I don’t mind paying my fair share, but the second job is hard on the kids.”
Tennessee state and local government imposes one of the lowest tax burdens on its residents. Maine levies one of the highest.
When government spends more than it collects from us in taxes, it makes up the difference by borrowing or printing the money, or by taxing us more. Last year was the 4th in a row that Washington overspent by roughly $1.5 trillion. That’s why your paycheck is now 2% smaller – Washington needs more of your hard-earned money to pay for its overspending. A typical Maine family earning $50,000 per year has started sending an additional $1,000 in “payroll taxes” to the federal government. Everyone who takes home a paycheck is now shouldering this extra burden.
What could you do with that $1,000 if the federal government wasn’t taking it from your pocket because of its overspending?
You could pay your 2013 monthly electric bills. The average Maine household pays approximately $82 per month for electricity. Multiply that by 12 months to equal $984 – roughly what you’re additionally sending to Washington for its overspending. You’ll now have to find that money elsewhere to pay your monthly power bills.
Maine state government also overspends. That’s why it has struggled for years to balance its budget. Unlike Washington, Augusta is required by our state constitution to balance the books every year.
Overspending by state government hurts Maine families. The maximum personal income tax collected by other states from their residents averages approximately 5.5% per year. Maine state government collects a maximum of about 8% on family earnings above roughly $40,000 per year. This additional 2.5% tax allows Augusta to fund its overspending. A two-income household earning $70,000 per year is sending an extra $750 to Augusta because our state government is bigger than those of most other states relative to our populations.
What could your family do with that $750 if Maine state government didn’t tax it from you because of its overspending?
You could fill the family car with gas for four months. That assumes gas at $3.75 per gallon and a weekly 12-gallon fill-up. That’s a lot of trips to work, school, or the grocery store. Too bad Augusta is taxing that additional money from you to pay for its overspending.
Maine city and town governments are also overspending. That’s why local property taxes have more than doubled during the past twenty years. If municipal government spending had grown by the rate of inflation, property taxes would only need to be about one-half of what they are now to pay for schools, fire and police protection, local roads, landfills, and other necessary local services.
The average single family home in the Portland area is taxed roughly $3,000 per year. If local government had not overspent during the past two decades, that property tax might be one-half that amount, or $1,500.
What could you do with that extra $1,500 if your city or town government was smaller?
You could pay one-half of your monthly heating oil bills this winter. On average, it costs $3,000 per year to heat a single family home in Maine with oil. $1,500 used for home heating instead of local government overspending would help our struggling families during these difficult times.
Regardless of your family circumstances, Mainers are paying more than we should to federal, state, and local governments because of their overspending.
Moving forward as a country and a state, and in our communities, it’s important for us to realize that government overspending hurts our families. Less money in your pocket to pay for government overspending means fewer choices, less freedom, and more government dependency. Instead, let’s limit the size of government, end wasteful and unnecessary spending, and allow our hard-working families to keep more of their own money.
Then, fewer of our fellow Mainers will need a second job to make ends meet.Tweet
Bruce Poliquin is the former Maine State Treasurer and a 2012 Republican primary candidate for the United States Senate. He has 35 years of experience owning and managing businesses. Bruce is a proud third-generation Franco-American Mainer and Harvard University graduate. Visit BrucePoliquin.net for his most recent commentary and analysis on media outlets throughout the State about the important issues facing Maine families and their jobs.