The federal government has taxed income for more than 100 years. Some states have taxed income even longer, but state income taxation didn’t really take off until the post-World War II era.

Today, 43 states impose a personal income tax, and 47 tax corporate income. In 1969, Maine adopted personal and corporate income taxes.

Almost from the beginning the federal government used the income tax as a major revenue source, and as a tool to stimulate a wide range of social and economic programs. The definition of income has changed many times and the number of exemptions, exceptions, deductions, credits, etc., has proliferated wildly. Many think today’s federal income tax system is unfair, unwieldy, and so complex that most taxpayers are at the mercy of tax experts.

States welcomed the revenue, but historically have been reluctant to use the tax to achieve their own social engineering goals. A handful of states simply pegged state income tax burdens at a fixed percentage of a taxpayers federal tax burden; in other words, full conformity.

This strategy has the benefit of reducing income tax collection costs, because individual taxpayers avoid separate bookkeeping and tax preparation. However, it saddles these states with the ever-widening social and economic agenda fashioned by federal tax policy – a social and economic agenda that doesn’t always fit state policy objectives or revenue needs.

The majority of states (including Maine) have rejected full conformity with the federal income tax code. They have fashioned their own definition of taxable income; they have individually conformed with those federal income tax code provisions that meet their needs, while rejecting other federal tax code provisions.

This careful and selective approach to conformity is most apparent when individual states consider federal tax code provisions that carve out tax benefits for special interests groups like businesses, farms, industries, energy sources, types of research and development, etc.

The beneficiaries of these tax provisions argue that they serve national interests. Opponents see them as unfair tax loopholes that are often too broad, too large, or may no longer be needed. Moreover, they reduce total federal/state revenues and shift the revenue-raising burden to those not benefited by the special tax provisions.

Fast forward to the present: In December 2015, Congress passed and the president signed the “Protecting Americans From Tax Hikes Act of 2015,” known as the PATH Act. Only in the double-speak world of politicians is cutting off a special tax benefit, or closing a loophole characterized as a “tax hike.” Most see these steps as increasing tax fairness.

The PATH Act contained 130 separate tax related items. Many were useful housekeeping measures, but approximately 50 were controversial special interest tax benefits – so controversial that they were originally enacted as temporary legislation, then extended for an additional period of time, and then extended again and again.

The PATH Act closed very few loopholes. It represented little more than congressional horse trading between Democrats and Republicans that made some of these controversial provisions permanent; others were again extended.

It led one Washington think tank to conclude: “The deal will revive or make permanent ineffective tax breaks for businesses. (It) will increase the (federal) deficit by $680 billion over the next 10 years. The trade-off between the good and the bad provisions is not equitable.”

True, but the PATH Act is law. Maine (and other states that historically have rejected full conformity) must decide the degree to which they will conform to this Act. Full conformity will undoubtedly shrink state tax revenues, but many of the 130 provisions in the act deal with housekeeping matters and/or are inconsequential to Maine. Some clearly serve Maine’s economic interests, and conformity with those makes sense.

But Gov. Paul LePage – who never met a business tax break he didn’t like – wants nearly full conformity and omits only some minor depreciation provisions. The cost in lost state revenue of his conformity proposal (amended LD 1564) is $38 million over the bi-annum, and more in future years.

His proposal (which goes beyond the PATH Act) expands the Maine Capital Investment Credit. The benefit of giving these state tax dollars to corporate interests is speculative at best, and at worst irresponsible given spending shortfalls for education, drug control and rehabilitation, and elderly and low-income people’s needs.

Maine has a long history of corporate welfare with little to show for it. We recently were duped by a one-day loan gimmick (millions were lost); now we face being duped by a conformity gimmick. Throwing money at corporations in the vain hope that this will create jobs has not worked. It needs to stop.

The Maine House has put a more modest conformity proposal on the table; it meets the governor’s proposal more than half way, and meets some of the unmet spending needs noted above. Let’s hope the legislators hold firm.

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.