Friday, March 7, 2014
For as long as most can remember, the two major political parties in Maine have disagreed over the value of income tax cuts. Generally speaking, Democrats have favored higher income taxes to pay for more government programs and services. They believe that bigger government combined with our safe communities and pristine natural environment is the right combination to attract business investment and jobs to Maine. Republicans have pushed for smaller government with less spending and debt, lower income taxes, fewer regulations, and less expensive energy and health insurance to incentivize entrepreneurs to invest in Maine and create jobs.
Last week, a bipartisan group of state legislators finally agreed that lower income taxes are needed to help grow Maine’s economy and create badly needed employment. Thankfully, the “Gang of 11” did not include divisive “tax the rich” language in its proposed overhaul of Maine’s smothering web of taxes. Instead, the bipartisan plan states…
“Income taxes are among the factors that individuals and businesses consider in making location decisions. These reforms would make locating in Maine more attractive for individuals creating or bringing jobs to Maine, for retirees choosing their formal residence for tax-purposes, and for small businesses, thereby laying the foundation for a more prosperous economic future.”
Maine’s bottom ranking among the state business climates is convincing an increasing number of legislators that Maine’s income taxes are simply too high to attract business investment and jobs. The non-partisan Tax Foundation compares the economic health of the 50 states as measured by a number of important factors. During 2000-10, the ten states with the lowest tax burdens (income, sales, property, and other taxes) had, on average, greater population, employment, and personal income growth than the highest taxed states. Maine has been among the highest taxed states for years.
Unfortunately, the personal income, estate, and business tax cuts proposed by the Gang of 11 are more than offset by a dramatic expansion of sales and excise taxes imposed on Maine families and businesses in the plan. Although final figures are not yet available, the net result is estimated to be a $150 million overall tax increase!
The tax burden on Maine families and the companies that employ them should fall, not rise. The bipartisan Gang of 11 acknowledges that such a plan would help the state economy grow and create more jobs for Mainers. Let’s encourage our legislators to proceed down this path so hard-working Maine families and their employers will support this long-overdue reform.
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.