Feel like your taxes are too high? Many Maine people do, because like all state tax systems, Maine’s tax system is unfair. It places too much responsibility on those who are least able to pay.
Did you know that whether you make $20,000 a year or $20 billion a year, you pay the same marginal income tax rate? Sales tax falls most heavily on middle and low-income people, especially because we exempt a lot of the goods and services rich people buy (like expensive legal and accounting services).
Before LD1 came along, low-income people often paid a ridiculous portion of their incomes in property taxes. Now, with the expanded Circuitbreaker program, no one should pay more than 6 percent of their income in property taxes, and once LD1 is fully phased-in next year, that number will be lower. We obviously need comprehensive progressive tax reform.
Maine people understand, however, that government needs to be able to pay for services that are vital to our communities. Healthcare, education, roads, public safety, fire and police – all these things take money. We must demand accountability and always look to do things less expensively, but the reality is “Tanstaafl.” There ain’t no such thing as a free lunch.
Maine’s investments in its communities have paid off. The Corporation for Enterprise Development puts Maine in the top ten in its “Assets and Opportunities” rankings, measuring things like tax policy, business development, financial security, education, healthcare and home ownership. Maine ranks fourth among the states in social health, an indicator that includes high school graduation, infant mortality, homicide rates and other such things.
TABOR, the “Taxpayers’ Bill of Rights” is inconsistent with our values and fails to address fairness problems in our tax system. TABOR requires strict spending limits at all levels of government – even stricter than the ones Maine just enacted. By restricting spending growth to the rate of inflation (the rate at which prices grow), TABOR would make it more difficult for government to provide needed services over time.
This is true because the costs of services that government provides grow faster than the rate of inflation, especially for education and healthcare. However, our economy grows faster than both inflation and the costs of government services. That’s why government today provides more and better services than in the 1990s, even though state spending is lower relative to state income than it was back then.
Moreover, spending needs can change suddenly, often for reasons we can’t control. Our aging population will be a significant but temporary challenge. Bush’s tax cuts for the wealthy, supported by Senators Snowe and Collins, have led to huge cuts in vital programs, leaving Maine to pick up the slack.
TABOR would hamstring us.
Colorado, the only state that has tried TABOR, has shown us the damage it can do. Colorado’s TABOR, which had the same spending formula as the one on our ballot this year, was in effect for 12 years, until 2005, when voters suspended it because of its impact on state services. While TABOR was in effect, Colorado’s went from 23rd to 48th among the states on access to prenatal care. Colorado is now 46th in high school graduation rate. Maine is number one! Colorado once was an average state on child immunization rates, but now ranks 50th.
Coloradans originally supported TABOR because, like us, they felt taxes were unfairly high. TABOR doesn’t make the tax system fairer, however. It just makes citizens pay directly for services government once provided, or reduces the quality of those services.
TABOR is not the answer to our problems. Progressive tax reform is. Stay tuned.
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