Gov. Paul LePage’s tax proposal will shift many costs to municipalities, likely causing significant property tax increases. It will shift more tax burden to lower and middle income taxpayers while giving disproportionate benefits to higher income earners.

The claim is made that elimination of revenue sharing will be more than offset by the proposed decrease in income tax. The income tax savings for residents of a particular community will not be evenly distributed. Decreasing the 7.95 percent rate to 6.5 percent will save a couple earning $60,000 about $263. A couple earning $200,000 would save $2,293. The elimination of funds from revenue sharing will be made up by increased property taxes.

The current ratio of income, sales and property taxes is 32 percent income tax, 24 percent sales tax and 45 percent property tax. The governor’s proposal would change those figures to 20 percent income tax, 32 percent sales tax and 48 percent property tax. A fairer and better balance would be approximately 33 percent for each.

The change in the homestead exemption adds to the generational benefit problem. The family under the age of 65 with a $200,000 home and a $60,000 income in Poland would have to pay approximately $140 more in property tax. The over 65-family would receive a larger exemption regardless of need. It has been suggested that 220,000 families in Maine would lose their homestead exemption, while 95,000 would have an increased benefit.

The proposed plan of taxing tax-exempt property is difficult to accept. Many organizations, such as charitable summer camps and land trusts, do not have funds to pay the suggested taxes. They would either have to sell property or, in the case of camps, admit many fewer disadvantaged children.

The majority of non-taxable properties are in 43 communities. Approximately 350 communities would pay little to no tax because they have minimal to no non-taxable properties.


A better solution would be to exempt the primary property where a tax exempt entity is —  i.e. the primary campus of a college or the property housing the facility of a hospital — and then fully tax other properties it owns, including any future purchases.

The estate tax affects a fraction of a percent of taxpayers. Instead of eliminating it, increase the deduction to the federal standard. This should not affect the transfer of a business because business owners should be making plans to effect a transfer to family members prior to death if the business is to remain in the family.

The sales tax proposal has many flaws. Increasing the rate to 6.5 percent is regressive. Setting up a rebate policy is opening the door for future administrations to eliminate the provision. Increasing the rate will drive more people to make out-of-state and online purchases.

The decrease in the meal tax eliminates income to be derived from out-of-state visitors. The 60 cent difference on a $40 check is not going to deter Mainers from going out to dinner. The same is true with liquor and short term auto rentals.

The lodging tax should be increased 1 percent. Most states have a significantly higher lodging tax. There are few if any people who make their decision where to vacation based on a lodging tax.

The sales tax base should be broadened to provide more stability, though I disagree with many of the proposed categories to be taxed. Many people who clean homes, plow snow and mow lawns are individuals who try to make a few extra dollars. Adding the cost of collecting, tracking, and remitting sales tax adds to their business costs. Are we asking a teen who does these seasonal jobs to earn money for college to suddenly become a business?


If many of the professional services are taxed, people will go out of the state for those services. There is no reason individuals and businesses cannot use an out-of-state accountant, attorney, or advertising agency. Taxing many of these services will increase costs to businesses and that cost will be passed on to consumers.

The governor has said that certain states have eliminated the income tax and they are prospering. He neglected to say that Louisiana and Kansas are floundering and have made significant cuts to education and other necessary programs to make up for the lack of revenue.

We have a beautiful state with wonderful people. Trying to balance the budget on the hope of finding multi-millions in fraud, waste and abuse, eliminating income taxes, having the state shirk its responsibility to support communities, and causing significant increases in property taxes is not the way to plan for growth while keeping our children in Maine.

Stan Tetenman is a member of the Poland Board of Selectmen.

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