Governor LePage wants to eliminate the income tax, which he says will give more money to the middle class. What he doesn’t tell us is that much more will go to the wealthy and that losing this revenue will shift the tax burden onto local towns and property taxes.
Less revenue will also raise the cost of higher education and create significant cuts in state and local services. New Hampshire has no income tax, so let’s compare and do the math.
I live in Maine, my brother lives in New Hampshire. I pay $400 in income tax, he pays nothing. I pay $2,000 in property taxes, he pays $7,000. Maine’s in-state tuition is $12,000; New Hampshire’s is $17,000. So a typical family with one child in college might gain $400 a year in income tax under the governor’s plan but could lose $10,000 each year in higher property taxes and education costs. That’s hardly a good trade.
Taxes pay for necessary state and local services, including education, fire and police, roads and bridges, and a many others. To have a decent society, we all need to pay taxes. The governor apparently wants to shift the tax burden from the state to local level as a way of “shrinking” government. But town budgets can’t pick up this burden as their budgets are already strained from the reduction in state revenue sharing the last several years.
What we need isn’t lower taxes, but fairer taxes. The fairest tax is the graduated income tax since those who earn the most pay the most, yet this is what the governor wants to eliminate. The least fair is the property tax, since it is levied on all regardless of ability to pay, yet the governor’s plan would surely increase this. The sales tax lies in the middle.
Fairer tax reform would reduce the property tax on low income farmers and increase the tax on multimillion dollar estates. Fairer taxes would keep, and even increase at the high end, graduated income tax rates. Fairer taxes would also keep the estate or death tax which, contrary to political hype, only applies in Maine to estates worth over 2 million. Fairer taxes mean the state should renew its responsibility to revenue sharing to reduce the burden on towns and property taxes, and also renew funding for education at the 55 percent level as approved by voters over 10 years ago. As for the sales tax, a slightly higher rate would bring in much needed “free revenue” from tourists, most of whom already pay higher rates in their home states.
Governor LePage is also wrong in labeling nonprofits as “takers, not givers” and proposing to tax them to pay for his misguided tax reforms. One only has to look at local scholarship foundations, churches, the Pine Tree Camp for disabled children, the Good Shepherd Food Bank and a host of other nonprofits to see how much these groups give and do for Maine communities each year.
The governor needs to man-up and apologize to the nonprofit community, too. They are the true givers in our society, as are the many Maine philanthropists such as Stephen and Tabatha King.
In conclusion, beware of the governor and others like him who promise lower taxes but don’t give the consequences. As the comparison to New Hampshire shows, they are only telling half-truths. Instead, think more carefully about ways to make taxes fairer and insure they get used to reduce property taxes and support education in ways that benefit us all.
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