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Jim Wellehan is the owner of Lamey Wellehan.
Tax day is in May this year, and this means some large corporations are getting ready to celebrate their annual windfall.
That’s because every year, while Maine families and small businesses pay our taxes, companies like Amazon and ExxonMobil, don’t play fair. They employ an army of tax attorneys and accountants to exploit a legal loophole that allows them to stash their U.S. profits in foreign nations with much lower tax rates, commonly known as tax havens. That’s a big problem, and here in Maine, corporate tax haven abuse costs Mainers an estimated $52 million in lost tax revenue each year.
My dad started Lamey Wellehan Shoes in Lewiston in 1914 and since that time, our family business has flourished. Over a hundred years later, we’re still going strong and now have six locations throughout the state. My dad taught me many things about business, but what stuck with me most was the utmost importance of fairness.
Community-based businesses like mine gladly pay our taxes to support our neighbors, our customers, and our state. Small businesses take pride in supporting our communities by contributing to public investments such as roads and bridges, healthcare and the public education system.
On the other hand, multinational corporations that exploit tax havens couldn’t care less. Every time they abuse this loophole to avoid their fair share, they shortchange Maine’s communities. As a result, our towns and schools have struggled for years with fewer resources than they need to thrive.
Here’s how big corporations do it: When a company that does business all over the U.S. pays Maine income taxes, it pays based on the percentage of national sales it generates in Maine. Those big corporations use tax havens to make their domestic profits look much smaller than they actually are — so they don’t pay what they really owe in taxes. It’s a legal loophole that they’ve exploited to the point that they have small businesses and ordinary Mainers footing their bill.
When big corporations manipulate the system to avoid paying their taxes, it takes money out of our communities. That’s less money for schools, roads, broadband, clean water, public safety and parks. Those are the things that help communities thrive, and businesses like mine need thriving communities to succeed and grow. We pay our taxes to support those investments, and multinational corporations must do the same.
The use of tax havens also harms individual Mainers. When corporations don’t pay their fair share, that can only mean one of two things. Either the rest of us have to pay more taxes, or the state has to spend less on programs people rely on, like MaineCare and the University of Maine System. In short, by dodging their share of taxes, corporations are sticking Maine’s small businesses and ordinary Mainers with their bill. The use of tax havens isn’t just unfair — it’s also just plain wrong.
Luckily, Mainers and the small business community have a friend in Rep. Denise Tepler. Her bill, An Act To Prevent Tax Haven Abuse ( LD 428), will help clamp down on tax haven abuse by requiring corporations that do business in Maine to claim U.S.-based profits stashed in known offshore tax havens on their taxes.
This bill presents Maine lawmakers with a meaningful opportunity to put Maine’s people and places, not corporate greed, first. In doing so, they’ll support investments in our state that build a stronger, fairer economy for all of us, not just those at the top. It is time for Maine to take a stand against corporations that refuse to pay their fair share.