Maine’s population increased during the last decade by 44,000 people, but we added only 56 new jobs over that period of time! Economic activity in Maine is at a standstill. We are attracting too little investment, and we aren’t growing. And the reason that we’re not growing is that it costs too much to live and do business in Maine.
During the course of my campaign, I have spoken with scores of owners of large and small Maine businesses all across our state. I have asked each of them, what do we need to do in Maine to increase economic activity? What is keeping you from expanding your business? Not one of them has pointed to taxes as Maine’s biggest problem. Every one of them, on the other hand, has said that the costs of energy and health care and the cost, quality and attitude of state services are the big problems. And other recent surveys confirm that.
The single biggest challenge that we face today is how to lower those costs of living and doing business in Maine, and here is My Plan to do that. That is the only way we are going to get companies to invest here and to create the jobs, incomes and opportunities that we so desperately need.
As we grapple with chronic budget shortfalls, push to lower our costs and strive to make needed investments in Maine’s competitive advantages, we invariably will encounter tax-related issues that demand a responsible answer.
For example, what if we raised the gas tax by a few pennies a gallon so that we could fix our roads and bridges, but at the same time we eliminated the requirement for annual vehicle safety inspections? Drivers’ savings from not having to pay for inspections and fewer car repairs (because our roads would be in better shape) would dwarf the cost of a slight increase in the gasoline tax.
Or what if we added a penny to the meals and lodging tax and dedicated all the increased revenue to promoting and supporting tourism, which is Maine’s largest industry. We know that every dollar spent on promotion generates many times that for Maine businesses and increased tax revenue for the state.
Once we put in place a strategy to lower our costs, and once we get Maine growing and moving forward again, we will need to take a close look at opportunities for tax reform and change. We will need to determine whether our estate and capital gains taxes are driving people and their assets out of Maine. We will need to decide whether the local property tax is the right funding source for supporting K-12 education, or whether we need to examine alternatives. And we will need to figure out ways to maximize the percentage of their incomes that Maine people can keep for themselves.
I will not make promises that I am not certain that I can keep, and so I am not going to sign any blanket pledge about taxes. The job of governing Maine is more complex than that and demands honest leadership.
Tags: Budget, income tax
Hi Eliot:
As a tax practitioner who assists clients with state tax planning issues on a daily basis, I can tell you from firsthand experience that the income and estate tax system in this state does, in fact, drive a significant amount of wealth out of Maine.
Take, for example, retired Mainers who winter in Florida. Many of these taxpayers would prefer to spend only three or four months in Florida, and spend the remainder of their time, and money, in Maine. However, the tax savings that they realize from spending more than six months out of the state, and becoming non-residents of Maine, are too substantial to pass up.
Similarly, when local or national companies consider expansion opportunities and compare Maine to other New England states in terms of tax structure, Maine loses that beauty contest more often than not. Granted, taxes are not the only factor, but they are an integral part of the decision-making process.
We need to completely revamp our tax system to send a message to the national and international business community, as well as individual retirees, that Maine is open for business and appreciates Maine citizens who have worked hard their entire lives to save for a comfortable retirement. The tax reform package that was recently repealed would have been a step in the right direction, with its lower top tax bracket. I will be the first one to admit that it wasn’t perfect, but we need to start somewhere.
Based on what I have heard you say, and what I have read, you have my vote, Eliot. I trust that you will take the state in the right direction when you are elected.