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Don’t believe everything you read in the newspapers. Almost universal from the mouths of Maine’s politicians and business leaders, unchallenged in the word processors of Maine’s journalists, is the bipartisan notion that the state’s population is among the most heavily taxed — and that "tax relief" is urgently needed for this "burden." Often, the seemingly heavy load of local property taxes is the issue. But just as often the "total state and municipal tax burden" has been denounced. Such is the how the tax debate is "framed" in Maine. [For a discussion of political framing, see "The Linguistic Frame," at right.] Taxes are a burden (and not our social dues), it is assumed, and we are monstrously taxed. This assumption informs many newspaper articles. In an anti-tax op-ed in the January 9 Sunday Telegram, for example, Chris Harte, former CEO of the Portland newspapers, announced the founding of the Coalition for Reasonable Tax Relief for Maine, composed largely of — perhaps significantly, as we shall see — well-to-do business figures. Typically, state leaders use some variation of the sentence "we are just about the most heavily taxed state in the nation." The foremost evidence for this claim comes from United States census data: In 2002, Maine was number two when total tax collections in the state are divided by total personal income. The Legislature’s Office of Fiscal and Program Review has data that suggest Maine in 2002 ranked third. Take your pick: Mainers supposedly pay 12 or 13 percent of their paychecks in state and local taxes. But these numbers mislead, and they lead to answers to our tax questions that are "deeply flawed," asserts Christopher "Kit" St. John, head of the Maine Center for Economic Policy, the liberal research organization in Augusta, in papers he has written. "Only a distinct minority of Maine taxpayers" bear a significant tax load, he claims. Middle-income taxpayers, he says — calculated, for example, as the 20 percent of households that earn between $28,000 and $47,000 a year — only pay 11 percent of their income in taxes. One study puts the middle-income Maine burden lower, at 10 percent, he says, which locates middle-class Mainers in the middle of the 50-state pack. (It’s almost impossible to get away from that negatively charged word "burden." Maybe we should say "tax responsibility.") Middle-income people pay less than the overall 12 or 13 percent partly because poor people pay more. The rock-bottom 20 percent of households in income (less than $12,400 a year) have a tax rate of 25 percent. St. John also cites statistics from a study done by the District of Columbia of household tax burdens in the largest city in each state. Portland, which has high taxes for Maine, ranks only 27th for families making $25,000 a year — though it is ninth for upper-income families. The burden rests most heavily, therefore, on people making little money and on people making a lot of money. The burden on the latter is the hallmark of a progressive tax system, but it also may be the source of much of the groaning about taxes, since the rich are better able to complain than the poor. St. John feels, however, the burden on the poor ought to be addressed before the burden on the rich. Another big reason the tax burden is overstated, he claims, is that the exaggerators "are simply comparing total Maine taxes to the total income of Maine residents, as if only Maine residents pay Maine taxes." But think of all those summer homes on the coast. We have a higher proportion of such places than any other state. Nonresidents, according to Maine Revenue Service estimates, he says, pay 20 percent of Maine’s property tax on homes. And out-of-state corporate owners (like paper companies) pay 55 percent of all state and local taxes paid by businesses, he says, and these dollars amount to about a quarter of the total taxes paid in Maine. St. John hasn’t done the numbers on what these subtractions mean, but a back-of-the-envelope calculation of these tax "exports" indicates that Maine’s average total tax burden on residents may be overstated by 18 percent. There’s more: If the tax burden is calculated by including all local and state government fees as well as taxes, he says, Maine ranks lower than the US average. Michael Allen, the state’s chief tax economist, says he agrees with many of St. John’s criticisms. The census definitely overstates the amounts Mainers pay in property taxes, he believes. And he agrees that Maine has the highest rate of recreational homes in the nation — a little over 15 percent of the total — and they lessen the property-tax burden on the remainder. He points out, however, that if you subtract the contribution out-of-staters pay in taxes in Maine, you have to do the same for every other state in order to make fair comparisons. Still, Maine has the highest proportion of summer homes. Although Maine’s overall state and local tax burden, Allen believes, is "in the top 10," he agrees with St. John that the load is lighter for middle-income taxpayers than for high- and low-income people. He agrees with St. John, too, that when fees as well as taxes are combined, the government load Mainers pay for falls when compared to many states. This occurs because in a number of states government provides more services that people pay for on a user basis. California, for example, has a very large state college system. In the South, "the counties and states run a lot of hospitals," Allen notes. In Maine, we tend more to pay private institutions for these services. The questions Kit St. John raises about our tax burden may illustrate the high degree to which antigovernment conservatives successfully frame all things fiscal in Maine. Lance Tapley can be reached at ltapley@prexar.com |
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Issue Date: January 14 - 20, 2005 Back to the Features table of contents |
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