Maine taxpayers should remember: if the left hand says it won’t get you, the right one already did.

So far in this legislative session, the governor and lawmakers increased have taxes and fees by an estimated $400 to $500 million. And now, beginning July 1, the gasoline tax may increase by 6.1 cents – or 21.5 percent in just one year. They say this “surcharge” would be only “temporary.”

Maine is struggling economically. Maine proclaims the need for more tourists and business trade to enter our state, but then we raise Turnpike tolls and consider raising the gas tax? Hmm.

Then there is the biggest tax issue of them all: full reform. The bill, LD 1088, is beautifully titled “$75,000,000 to Residents of the State in Tax Relief.” It would drop the top marginal income tax rate form 8.5 percent to 6.5 percent. On the surface, it sounds great.

That’s the left hand talking.

This bill is sold as “revenue neutral” by increasing taxes on visitors. It would increase the tax rate on restaurant meals and lodging stays from 7 percent to 8.5 percent. It is estimated that about 50 percent of these revenues comes from out-of-staters. Yet this is only expected to raise a paltry $21 million.

Meanwhile, this same bill, contains a plethora of new taxes and tax increases to hit Mainers. Want to have some fun in the Great State of Maine this summer? Or, are you trying to save your money by having a “staycation” instead? Expect to pay new taxes.

Going to the movies? Taxed. Water park tickets? Taxed. Greens fees for golf? Taxed. Portland Sea Dogs tickets? Taxed. Theater, lecture or concert tickets? Taxed. Auto, boat, camping, home, garden, antique and animal shows? Taxed. Whale watches, scenic tours or wagon rides?

You know the answer. Hey maybe majority Democrats, if the bill passes, would hire mimes or clowns to soften the impact of these new taxes, or perhaps hire a band or DJ to throw a party and have it catered to celebrate its enactment. (Yup, all those things would be taxed.)

But maybe there’s a silver lining. Wealthy people who will flee Maine because of all these taxes will have to sell their expensive homes worth more than $500,000. Why is this good? Because there’s an “extra” real estate transfer tax assessed on those transactions.

Did I forget to mention they increased income taxes? Well, they didn’t. Technically. The Legislature got rid of indexing and reduced the standard deduction for Mainers. This will increase your income taxes, by $155 million.

That’s the right hand.

The most egregious example of a proposed tax hike is on paid health insurance claims, which is estimated to raise $60 million per year to fund Dirigo Health. The bill has been approved in the House. The public sector won’t be hit with this, nor will Medicare or Medicaid recipients.

Taxes tend to make things more expensive and less available. By raising them, Democrats don’t appear interested in access to health care, only monopolizing it. Everyone knows monopolies are bad. Why should a “people’s” monopoly be any different?

Democrats and some Republicans also passed the buck along. They cut $150 million from aid to education, municipal revenue sharing and tree growth and and the Circuit Breaker tax relief programs.

Do you recognize a pattern here? Vow tax relief, while increasing a bevy of taxes. Offer promises of putting money into pockets, but take the money out before it even gets there.

There two sides to every story. While lawmaker praise themselves for bipartisanship in budgeting, the real decisions were passed on to local school boards, selectmen or city councilors. This means increased pressure on property taxes. Your local schools or town government will feel the pain.

The Baldacci administration and lawmakers have said they have wrung their hands over the “difficult decisions” and “shared suffering” of what’s happened.

I would say while their mouths have been saying one thing, their hands have been doing something else entirely.

J. Dwight is a SEC registered investment advisor and an advisory board
member of the Maine Heritage Policy Center. He lives in Wilton. E-mail
[email protected]


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