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Matt Pouliot of Augusta is the Assistant Republican Leader in the State Senate and a member of the Taxation Committee.
Maine has the fourth highest tax burden in the nation at the same time policy makers are constantly discussing ways to attract more people to our state. The most recent state revenue forecast predicts $940 million more in revenue than was budgeted, while the federal government has sent $2.38 billion in relief money to state coffers since this time last year.
With nearly $3.5 billion in excess cash, and revenue growth of 3.5 percent to 4.3 percent predicted over the next three years, at least, state coffers are swollen to a size we have never experienced in our history. In short, state government has more money than it knows what to do with.
If there was ever a time when there was absolutely no need whatsoever to even consider raising taxes on Maine people or businesses, this is it.
Nevertheless, what seems to be an insatiable desire of some in the Legislature to spend as much money as possible was not tempered by the worldwide pandemic. Taxing and spending has become a reflex reaction in Augusta, and this huge influx of new money has not diminished the appetite.
As an example, let’s look at the schedule for just one day in the Taxation Committee. In one morning period, we debated bills that would raise the gas tax by 12 cents per gallon, raise cigarette taxes by $2 per pack, lower the threshold before estate taxes are required, and just plain tax people’s assets because we can.
Perhaps the most frightening of these bills establishes a precedent on which every Mainer should keep a close eye.
LD 1514: “An Act to Provide for Fairness in Property Taxation by Assessing a One-time Tax on Financial Assets” would authorize state government to tax money from your savings account, mutual fund, stock portfolio, or any other financial asset. This would not be a tax on income. Most who have accumulated, say, a retirement fund, have already paid income or other taxes on this money when they earned it.
This would be a pure seizure of your money, justified by the fact that some in state government think you have too much. While the bill, if passed, would assess a .5 percent so-called tax on an individual’s assets totaling more than $5 million, there would be nothing to prevent future legislatures from lowering the threshold and raising the amount of the tax after the precedent is in place.
If passed, it is clear this new law would put an immediate damper on the relocation of new citizens to Maine, especially those who spent a lifetime setting aside cash in order to guarantee a comfortable retirement. Young couples would surely be much happier to relocate elsewhere to a state that does not hold to such a radical idea that could endanger their future nest egg.
With record revenue coming from current tax levels and an enormous influx of cash from the federal government, Maine does not need more tax dollars — especially those that accrue from radical, unprecedented ideas that would drive wealth and capital away to friendlier places.