LePage uses town meetings to push harmful agenda

  • Mail this page!
  • Delicious
  • 0

Gov. Paul LePage’s call for further phased reductions in (and eventual elimination of) Maine’s personal and corporate income tax was rejected by both branches of the Maine Legislature, and by many in his own party.

His initial approach was to propose a constitutional amendment that would achieve these ends. If adopted, this approach would all but preclude efforts to resurrect the income tax in the future. However, to bring an amendment forward requires two-thirds approval in both the House and Senate, and the votes were simply not there.

LePage then proposed to reduce or eliminate the income tax via a citizens initiative. He joined his income tax agenda with his welfare reform agenda, and is now in the process of gathering the 62,000 signatures needed to put these measures before the voters in November 2016.

In an effort to gain citizen support for this initiative, the governor has embarked on a statewide series of town meetings. He vows to continue these meetings through 2016, presumably right up to Election Day. He is nothing if not dogged in the pursuit of his goals.

In the meetings held to date the governor talks a lot about the economic benefits of returning tax dollars to the people. Conspicuously absent in these meetings is any discussion of how we make up the nearly $1.6 billion dollar annual revenue loss created by eliminating income taxes.

LePage’s call for raising and expanding the sales tax was recently rejected by Republican voices in the Legislature. Similar proposals were rejected by a Republican-led initiative five years ago.

The governor’s suggestion that individual towns could maintain the services they value by raising property taxes is disingenuous. He knows that property tax burdens in Maine are already high. He knows that most Maine towns do not have a property tax base capable of being raised to offset lost income tax revenues.

The reality is, the governor has no plan to make up the revenue loss. He wants a smaller state government. His budgets over the first five years of his administration have proposed spending cuts to public schools and at the university level; cuts to road, bridge and other infrastructure needs; cuts to revenue sharing, public health and safety needs.

Without income tax revenues, the array and depth of these budget cuts will increase significantly. Is this the Maine we want?

One in five Maine children already live in poverty. A wide range of essential programs and facilities are already underfunded, among them jails, indigent legal assistance, elderly housing, and drug and mental health programs. We can’t seem to find the money to re-certify the Riverview Psychiatric Center, which costs us $20 million a year in federal aid. The list goes on.

Beyond the steep and damaging cuts in essential state programs, eliminating the income tax gives rise to a huge economic windfall to Maine’s very wealthy. Maine Center for Economic Policy data shows that the top 1 percent of Maine taxpayers will receive an average benefit of $61,000; a much larger group of middle-income Mainers will receive an average of $900.

Moreover, if some part of lost annual income tax revenues is offset by sales and property tax increases, middle-income taxpayers will quickly see their income tax benefit evaporate. For most Mainers the total annual tax burden will almost certainly increase.

The abandonment of a progressive income tax will give rise to an overall tax system – one already skewed to benefit the rich – that is even more unfair. State and local governments will be forced to rely on regressive sales and property tax revenues, taxes that invariably weigh more heavily on low- and middle-income families than they do on the wealthy. This makes no sense.

The idea that cutting or eliminating the income tax will somehow spur the economy (and offset revenue losses) did not originate with Gov. LePage. Increasing the wealth of the wealthiest in the belief that their spending and investment will stimulate the larger economy is vintage “trickle-down” economics.

In spite of Republican and tea party claims that this economic theory works, no evidence supports their claim. Bush tax cuts didn’t prevent the recent steep recession; they didn’t lead to a quick, healthy recovery. Most economists dismiss the theory as absurd.

At the national level, from the Eisenhower to Clinton administrations (50 years) we enjoyed unparalleled economic growth, a generally healthy economy, a narrowing of income disparities – all with progressive income tax rates much higher than they are today.

At the state level, recent data indicates that four of the five states with the largest cuts in public school spending (Arizona, Idaho, Oklahoma and Wisconsin) had sharply cut their state income taxes.

This is where LePage’s income tax policies, and his town meeting rhetoric, would take us. It is unacceptable.

Orlando Delogu of Portland is emeritus professor of law at the University of Maine School of Law and a longtime public policy consultant to federal, state, and local government agencies and officials. He can be reached at orlando.delogu@maine.edu.

  • Kafir911

    Yet again, we’re privileged to be graced with another lecture from an ivory tower liberal academic whose salary is paid by the taxpayer. (Kinda like a graduate from MECA who has no real talent expecting financial compensation for the junk he produces but no one wants).

    By disparaging a reduction in the state income tax and attempts to reduce welfare fraud while taking aim at the wealthy for not paying their “fair share”, he doesn’t make one mention of the $18.5 trillion national debt let alone our unfunded liabilities. He like his mentor, John Kenneth Galbraith, who doesn’t approve of the “horse and sparrow economic theory”, want us to continue down the path to socialism and Marxism despite evidence that it doesn’t work historically. Why doesn’t Delogu ever espouse Milton Friedman’s economic theories?

    Easy answer: Like most 60 radicals, they’re committed to the “revolution”. It doesn’t matter the issue, gay rights, civil rights, the environment, immigration, etc. For the Left the issue is only relevant if it advances their agenda of accumulating power and wealth to the exclusion of everyone else. Aren’t the Clintons worth @ $80m, Nancy Pelosi $200m and Al Gore $300m? If they earned their incomes legitimately it would be one thing, but these are some of the most corrupt scam artists in the country and Hillary wants to be president? She should be in prison.

  • poppypapa

    Class warfare rhetoric; the same old soupy propaganda that MECEP and the other redistributionists put out on a regular basis.

    “Tax cuts would disproportionately benefit the wealthy,” etc. Tax cuts disproportionately benefit those who PAY THE TAXES. 50% or so of residents in this state pay NO state income tax. So they should expect no benefit from tax cuts. As to the share paid by upper incomes, I don’t have the figures handy, but it’s usually something like the top 10% of income earners pay half or more of the income tax burden.

    Under those circumstances, you would expect them to benefit dollar wise more than everyone else if taxes are cut, simply because they pay the lion’s share and then some.

    As I said, class warfare. Orlando probably wants tax cuts to show up as refundable tax credits to those who don’t pay taxes, or as those who understand such things realize, another form of welfare.

    Is this the best Orlando and his friends have in the way of logic to support the continued unaffordable growth of government?

    Does he understand the difference between static and dynamic analysis? I’m hoping he does, but he just doesn’t want his friends on the left extremist wing to understand such ‘nuances.’

    • Christopher White

      It is always labeled ‘class warfare’ when those who benefit are the many. When the richest among us spend tens of millions to get candidates elected who then, once in office, proceed to make sure there are loopholes aplenty for their big donors, when there is a forty year trend of seeing wealth sucked out of the middle and working classes to fill the [off shore, tax sheltered] bank accounts of the super rich, that’s not ‘class warfare’ that’s the ‘free market’. Get a clue.

      • EABeem

        Funny, isn’t it, how the righties never mention that the greatest redistribution of wealth in this country is upwards towards the super rich. We have an economy rigged in favor of Trump and, surprise, surprise, Trump has all the little fishies taking the bait.

  • poppypapa

    I always look to those who have earned either all or most of their income in civil service & government consulting jobs to provide enlightened, objective commentary on tax policy.

    They don’t have a dog in the fight. They have an ox.

  • Queenie42

    Most Mainers would rather see property taxes cut.

    • Just Sayin’

      Most Mainers who are well off enough to own property, perhaps. A distinction worth making.