A Critical Exegesis of Maine's Creaky Tax
Code
The nation ought to have a tax system that
looks like someone designed it on purpose.
William Simon
Introduction
Prior
to the 1997 legislative session, I
embarked on a self-guided expedition
through the meanderings of Maine's tax
code. Liberally provisioned with caffeine
and armed with a laptop, I journeyed alone
into this heart of darkness, to read the
whole text in several sittings, to map out
what I found and to form fresh impressions
directly from the muddy
source.
Conventional
wisdom advises us to examine policy first
before focusing on the specific
topography. My approach was just the
reverse. I wanted to explore what was
there on the ground before drawing any
broad conclusions. This article is a
summary of my findings as modified and
expanded by our failed efforts at tax
reform in the 1997
session.
Let
me begin with one general
observation.
A
common plank found in every politician's
platform is support for business
stimulation and creation of jobs. Many
legislators in Maine and elsewhere, often
deluded by their own rhetoric, naively
assume that they are elected primarily to
create jobs, that they have enormous power
to influence business development, to
affect economic behavior, to attract
industry and to stimulate
growth.
Legislators
come to Augusta as little Keynesians or
little supply-siders--in either case,
falsely imbued with a sense that their
votes on tax and expenditure policies will
make all the difference to the economic
destiny of our citizens.
These
assumptions are heavily reinforced by the
fawning importunities of lobbyists who
assure each member that the granting of an
exemption, the forebearance of a tax, the
easing of a regulation or the expenditure
of funds in a certain direction will
catalyze an economic response from the
private sector that will mobilize our
citizens toward perpetual
prosperity.
Most
of this is hogwash. We are all slaves to
the same economy. Maine government is a
business--just one business among many in
this state--and the only one governed by
an unwieldy board of directors with little
or no management
experience.
The
Legislature too easily forgets that its
primary job is to raise money in simple
and orderly ways and then to spend it by
doing well and efficiently those few
things that only government can
do.
Taxes
exist to supply necessary revenue to a
well ordered government. If government
does its own job, if we educate kids,
imprison criminals, build sound bridges,
maintain roads, recycle the garbage, treat
the mentally ill, rescue the poor, and do
it all with reasonable efficiency, then
citizens should be
content.
We
need to tend to our
knitting.
The
purpose of this article is to critique the
revenue side of the government's business.
There is no better place to start than
with our sales tax.
The
Sales Tax
Since
its inception 45 years ago, the sales and
use tax rate has grown from 2% to 6%, not
just because state government hungers for
this major source of revenue, but also
because we have so riddled the tax with
exemptions. There are 77 numbered
paragraphs of past and current exemptions;
and this list does not include the
definitional exception for most
services.
As
a result, the tax has become both narrow
and steep, exacerbating the "bungee cord"
effect so appropriately publicized by
Professor Josephine LaPlante. A growth of
only two or three percent in the Maine
economy may enlarge our tax revenue by ten
percent; an economic downturn yields an
equally amplified effect in the other
direction.
While
some fluctuaton in the sales tax is
unavoidable, the inherent volatility of
the tax is now greatly exacerbated as the
ground under it has been eroded away by
constant constituent pressure for granting
of exemptions. We have lost still further
ground as our economic base continues to
shift from the sale and use of tangible
goods to the delivery of untaxed
services.
As
a result, the sales tax is too narrow, too
high and too accelerative. We tax Volvos,
snowmobiles and motor homes, things bought
when the economy is flush and the need for
government services is diminished. We
don't tax food, heating fuel, or domestic
electricity. When times are tough and
government is most in need of additional
support, revenue from the tax falls away
rapidly. This is largely because we tax so
few basic needs; and those transactions
that fall within the narrow band of sales
subject to the tax are hit at
comparatively high rates of six, seven and
ten percent.
As
a result, the sales tax swings, flutters
and fibrillates and seems often on the
verge of congestive failure. We tinker
with its symptoms; but no cure is
apparent. It needs a transplant. Consider
this series of
remedies:
A.
Drop the rate to only 3 or
4%.
B.
Cut most exemptions. Tax food, fuel
& electricity. Tax nearly all
buyers and most products. Make it
simple &
universal.
C.
Expand the tax to additional
services.
D.
Leave food and lodging at 7% (New
Hampshire is at 8%) and car rentals at
10%.
E.
Make the adjustments net out to revenue
neutrality.
Volatility
vs. regressivity
A
major argument against the above
prescription is that the tax may be
rendered more regressive than it is at
present, that the changes may fall harder
on the poor than on the
rich.
It
is difficult to reduce volatility without
being regressive. To reduce volatility the
state must tax fundamental necessities,
like groceries and electricity. Even
taxing services may or may not reduce
volatility, depending on which are chosen
to be taxed.
The
problem is how to address or repair the
regressivity of a less volatile tax. Here
are some answers:
1.
First, taxing food is no more regressive
than taxing clothing, used cars,
appliances and other things which the poor
presently pay a six percent tax on. Rich
people pay much more for all of these
things, including groceries, than do the
poor. So what difference does it make to
tax food if we already tax clothing and
basic transportation?
2.
If the sales tax drops to 3 or 4%, even
the poor will benefit by paying less for
their other purchases; this will make up
for much of what they lose by paying tax
on food and electric
power.
3.
Extending the sales tax to discretionary
services is another partial cure. Rich
people spend much more on services than do
the poor.
4.
Purchases made with food stamps and
general assistance vouchers must be
retained as narrow exemptions targeted to
benefit the very poor.
5.
The poor may be assisted in other ways
through adoption of an earned income tax
credit or liberalization of circuit
breaker refunds. In any case, problems of
the poor ought to be addressed directly
and not used as camouflage to justify
blanket exemptions that suit the economic
interests of the Maine Grocers'
Association.
Sales
Tax Exemption Policies
We
must develop a firm and consistent
statutory policy for defining exceptions
to the sales tax. If we fail to decide up
front what the legitimate reasons are for
the granting of exemptions, we will
continue to see the fabric of the tax
eaten into holes by the numerous moths who
nest in the State
House.
It
is a standing joke, no longer funny, that
the Taxation Committee should be
re-labeled as the "Tax Exemption
Committee." Most of the public hearing
time each year is devoted to complaints
from those who seek relief from the taxes
they are obliged to
pay.
Historically,
exemptions have been granted for the
following reasons:
1.
The special nature of the goods being
sold.
Food,
heating fuel and medicine come quickly to
mind as well as the first 750 kw of
electric power sold monthly to each Maine
household. These exemptions are granted to
every customer without regard for the
ability to pay.
It
is difficult to see how these categories
are any more special than winter clothing
for the poor or a used car for someone who
must drive to work in rural Maine.
Wouldn't fairness be enhanced if the tax
were imposed on all products, across the
board, but at a greatly reduced
rate?
2.
The special character of the
buyer.
Governments,
hospitals, churches, schools, pollution
control facilities and a few selected
charities are among those exempt from
sales tax for all purchases. Every year,
other groups come forward to the
Legislature seeking a blanket exemption
because their good works are just as
worthy as those for whom an exemption has
already been granted.
Perhaps
we should grant a generic exemption, as we
have done with property and income taxes,
to all charitable organizations that meet
certain criteria. We should either do this
or else eliminate such exemptions
altogether and make everyone pay this
simple tax at a reduced
level.
My
bias is toward the latter
solution.
3.
Pyramiding.
The
sales tax is designed to be imposed only
once, at the end point in the life of each
product when it is delivered by retail
sale to the ultimate consumer. We avoid
taxing the product or its components at
intermediate steps. In this respect a
sales tax differs from the system employed
by many other countries, the value-added
tax that is incrementally imposed at each
stage of processing from raw material to
final sale.
This
effort to avoid pyramiding generates
exemptions of substantial value. For
example, we exempt raw materials, energy
and machinery used in manufacturing. We
justify these exemptions on the theory
that the manufacturer's products may
eventually be subject to a retail sales
tax, if not in Maine, then somewhere
else.
But
this is often not the case. Take the paper
industry as an example. Trees are not
taxed when they are sold to the mill
because they are the raw materials from
which paper is made. Neither is China clay
used as coatings. The machinery and
electricity used in the plant are not
taxed because they are part of the
manufacturing process.
But
is the paper taxed when it is finally
sold? Not by Maine. Most paper is shipped
out of state. And even if the paper is
used here in Maine, we exempt newspapers
and periodicals from sales tax on the
general principle that these products are
good for us.
Thus
it is safe to say that the paper industry,
Maine's largest economic activity, is
exempt from our major state tax, the sales
and use tax.
Trade-in
credits for automobiles and other products
are exempt on the theory that the used
article given in trade has already been
taxed once and will be taxed still again
when the dealer resells it. Pyramiding
also makes us reluctant to tax services
like ski-lift tickets when we have already
taxed the purchase price of the machinery,
the electricity that operates the lifts,
and the wages of those who work on the
mountain.
Pyramiding
is a legitimate basis on which to grant
exemptions; and a certain amount of
pyramiding is unavoidable, particularly
when the sales tax is extended to
services. However, exemptions should be
sparingly granted and only when the end
product is actually taxed. In the final
analysis, the significance of the problem
is greatly diminished if the rate of tax
is dropped dramatically from 6% to only 3
or 4%.
4.
Exportation & migration; ease of
evasion.
Appliance
stores in Maine towns near New Hampshire
have a hard time turning a profit when
they must sell goods at a six percent
disadvantage to competitors across the
line. It goes without saying that
broadening and lowering the tax to only 3
or 4% would reduce significantly the
intensity of this perennial border
war.
Unfortunately,
extension of the tax to services creates a
new problem that has led to defeat of
service taxes in other states. Many
services in today's economy are highly
mobile and thus importable, not only from
neighboring states but also from all other
states and foreign countries as well.
Accounting and tax advice, computer
software development, engineering and
design consulting, advertising services,
and many other such products of the human
brain are shipped across state and
international lines freely by fax,
internet and mail without notice to local
taxing authorities.
Thus,
the state that imposes a tax on such
services may not be able to collect it.
The service providers who can be forced to
pay are the local professionals, those who
are already paying state income taxes
based on the same fees that the state
seeks to tax as a sale. Because
out-of-state providers get off Scot-free,
they are able to exploit an unfair market
advantage.
Not
all services are quite so exportable; and
not all suffer from such collectibility
impediments. But when a state does extend
its sales tax to services, it must do so
selectively, picking well-defined,
non-mobile service functions that can be
taxed directly and efficiently without
giving an unfair advantage to non-resident
providers.
We
already tax hotel rooms, restaurant meals,
auto rentals, telephone service, cable TV
and videos. Other services can be added to
broaden the base of the tax without
risking an exportation of the underlying
business revenue.
Politics
of the Sales Tax
Anyone
who thinks the sales tax should be left
well enough alone should be forced to read
the statute. It is no longer a tax code.
It is a chaotic, deconstructed flim flam,
with no discernible thread of coherent
policy to tie the text together. The rich
pay no tax at all for caviar and smoked
salmon, while everyone, rich and poor
alike, pays 6% on potato chips and
Coke.
Does
it make any political sense to suggest
incremental reform? Should we proceed one
step at a time--perhaps by adding a few
new services? Should we remove the
exemption for food or electricity? Do we
dare to tax funeral services or ski lift
tickets? Should we continue the snack tax?
Do we have the steel to confront once
again the Tax Committee's nemesis, the
Girl Scouts of America with their cookies
to sell? Of course not.
The
only answer is to start over. Begin by
adopting a new and dramatically lower
rate--no higher than 4%, and perhaps as
low as 3%. Both rates should be looked at.
It is the lower rate that demonstrates the
value of the overall reform and makes it
politically viable. 5% won't do. We were
there just a few years ago and have now
broken our promise to return in each of
the past six successive sessions.
Having
adopted a target rate, we should
reconstitute the tax on the rigorous
assumption that every sale will be
included, no matter what the product and
no matter who the buyer. Exemptions, when
granted, should be based on practical
considerations of collectibility and
enforceability. Pyramiding should be
avoided but not
shunned.
When
the package is complete, it should be
adopted as an organic whole, a
self-contained, free-standing,
revenue-neutral reformation of the sales
tax itself isolated from other issues.
While it may irritate many constituencies
to find themselves taxed by the new code,
my guess is that fairness alone will carry
the day if the resulting rate is low
enough to demonstrate the benefits of a
truly comprehensive, consistent,
broad-based source of
revenue.
The
Personal Income
Tax
The
income tax is the twin of the sales tax,
equally as large, equally as volatile, and
equally fundamental to the support of
state government, but simpler in structure
because it is piggy-backed to the federal
return. We have only just begun to riddle
this tax with our own local credits and
exemptions.
Maine
prides itself on the progessivity of its
income tax rates. They range from 2
percent to 8.5 percent with intermediate
brackets at 4 and 6.5 percent. Yet, the
highest rate kicks in so early (at only
$16,500 for a single person) that for many
taxpayers, the rate may as well be
flat--and relatively high in comparison
with other states.
As
for the lowest brackets, a tax of only 2
percent on incremental income above the
standard deduction and exemptions is
hardly worth collecting. The lowest rate
of 2 percent exists to collect a tax that
peaks at $83 for the top end of the
bracket. Many taxpayers file returns to
pay only 20 or 30 dollars in tax, less
than the cost of processing the
forms.
In
1997 the Legislature addressed this latter
issue by creating a credit to eliminate
many low income filers. It would be just
as effective simply to condense the rates
and increase the standard deduction to
achieve a similar result in a more direct
and rational fashion. Two brackets of 4
and 8 percent, respectively, ought to be
sufficient to collect the revenue we need
while preserving a simple progessive
structure.
The
Corporate Income
Tax
The
corporate income tax produces less than
twice as much as the lottery and only ten
percent of what is generated by either the
personal income or the sales tax. It is no
major engine of state
finance.
We,
the public, have no idea where corporate
income taxes come from. Each corporate
taxpayer is entitled to the same financial
privacy that you and I have in the payment
of our personal taxes. This is true even
if the company is traded on a national
stock exchange. While the aggregate
performance of a public company is freely
known, its activity within any given state
is proprietary
information.
It
is difficult, time consuming and expensive
for a state like Maine to collect income
taxes from a national or international
conglomerate whose business activity in
Maine comprises only a fraction of its
world-wide enterprise. It is too easy for
the company to shift costs and revenue
from one jurisdiction, or one subsidiary,
to another. The corporate income tax is
our least efficient to collect.
Avoidability is its distinctive feature. A
single case history will illustrate the
point.
When
tax credits for Bath Iron Works came under
discussion during May of 1997, the
company's managers gave us a sketch of
BIW's tax history. For many years prior to
1995, BIW was owned as a highly leveraged
subsidiary, first by a flooring firm and
then by an insurance company. During these
years BIW carried a huge load of debt;
interest on the debt eliminated profits.
Because of debt service, BIW paid no
corporate income taxes to the state even
though it was Maine's largest private
employer with a commensurately large
volume of business
activity.
When
the company was acquired by cash-rich
General Dynamics in 1995, the debt was
paid off. Overnight, BIW became
profitable. It paid six million dollars in
state income taxes in 1996, representing
nearly ten percent of Maine's corporate
income taxes collected in that
year.
If
only one company can account for ten
percent of the total, how many other major
corporations pay us nothing at all, year
in and year out, while doing significant
business in this state? We can only
speculate.
If
we all agree that industry ought to
provide its fair share of support for
state government, how can we better
collect from business sources the revenue
that Maine needs to subsist? Let me offer
two suggestions:
Franchise
Taxes
When
business taxes were first invented, they
came in the form of franchise taxes that
were levied as a fixed percentage of
revenues generated from business activity.
These were commonly imposed without regard
to profitability although it is possible
to temper the tax by adjusting the rate
for profits or losses encountered. New
Hampshire continues to rely heavily on
this form of business taxation; and Maine
has a number of such taxes left over from
the days before corporate income taxes
were adopted.
The
best example is the insurance tax which we
collect at the rate of 2% of the premiums
paid on policies written in this state.
Insurance companies are exempt from income
taxation; but they must pay 2 percent on
premiums regardless of whether they show a
profit. The state has little need to
double check the internal
bookkeeping.
A
tax in this form may fluctuate a little
with variations in the economy; but
revenue to the state is more consistent
and reliable than a tax based solely on
profit. The state takes its small share
and then gets on with its own business of
providing necessary
services.
Consider
this as a hypothetical exercise: Begin by
aggregating all the revenue that is
generated by the paper industry in this
state. Compare this with the total of all
corporate income taxes we obtain from the
same source. Then determine at what level
a franchise tax might be substituted to
produce a comparable flow of annual
taxes.
The
virtue of such a plan is that every
company would have to pay the tax in
proportion to its production and not in
inverse proportion to its accounting
ingenuity. The state would collect the tax
with less effort and could count on
getting it every year in a more regular
flow.
Credits
& Inducements
If
the corporate income tax fails to function
as a steady and efficient source of public
revenue, then perhaps we should create
stronger inducements for it to be paid or
else sacrifice part of it for something
else we want. Consider an idea which
combines both
approaches.
We
frequently extol the virtues of job
creation, the employment of one person by
another which is the gestation of business
development; but we certainly do little to
make the process rewarding. When a
business elects to hire a new person, we
bury that business with new forms, taxes
and administrative requirements, as though
we were punishing the entrepeneur for
doing something right.
The
new employer must arrange for Social
Security and Medicare taxes, withholding
taxes--both state and federal,
unemployment insurance--state and federal,
and mandatory workers' compensation
coverage. The employer must be familiar
with and abide by anti-discrimination
laws, OSHA directives, minimum wage rules,
overtime requirements, child labor laws,
the family leave act, and VDT and
polygraph protection laws. Every layer of
government has its say. Even the European
Union insists that Maine employers fulfill
certain conditions for selling our
products abroad.
We
have made the employment of one person by
another into one of the most burdensome
relationships known to the
law.
Yet,
we ask the employer to do more than just
comply with the law. We want the employer
to offer health and dental insurance for
individual workers and their families,
retirement plans to supplement Social
Security benefits, day care accommodations
for children, worker disability
protection, life insurance, education
options and other valuable fringes. There
is no end of things that we would like
employers to do for their workers; but
does the government offer any inducement
or reward for all of this? Nothing but
deductibility for some of the
expense.
In
order to make the employment relationship
into something of greater value in this
state, why not grant a general credit to
the employer for some small portion of the
state withholding taxes and fringe
benefits afforded to its employees; and
let the credit be applied against the
state income taxes otherwise owed by the
employer. If the aggregate credit is
capped at a fixed percentage of the
employer's own tax, then the employer will
be "on commission" to report and pay its
income tax liability. The credit would not
otherwise be available.
A
credit of this sort would induce payment
of corporate income taxes here in Maine
and would reward all Maine employers, not
only corporations, but also sole
proprietors and partnerships, for doing
what we most want them to do: put more
people to work and with decent
benefits.
The
BETR/TIF Double
Dip
Businesses
in many states are demanding and receiving
special concessions on the taxes they owe
to local communities. In some states
business personal property is wholly
exempt from taxation as a matter of state
law. Our Maine Constitution prohibits us
from creating any new exemptions to the
property tax unless the state reimburses
each affected community for at least half
the resulting loss.
In
an effort to keep up with other states,
Maine has empowered its municipalities to
create Tax Increment Financing Districts
("TIFs") to induce industrial development.
Under TIF, a community may voluntarily
reimburse to an expanding company the new
property taxes that the town would
otherwise collect and keep. When a
community enters into a TIF agreement, a
business that creates new development
within the TIF district may have all of
its annual property taxes for the
expansion refunded for a negotiated term
over many years.
Although
the community gives up its tax revenue
from the expansion, it suffers no other
collateral loss. Its revenue sharing
reimbursement, its school funding
distributions and its county tax
obligations remain the same--as though no
new value had been added to its tax rolls.
Thus, other communities in the state and
within the same county indirectly
subsidize the town's loss of tax revenues
from the TIF district.
In
addition to TIF, we now have the Business
Equipment Tax Reimbursement ("BETR")
program under which most businesses are
entitled to reimbursement from the state
for property taxes paid on business
personal property purchased after April 1,
1995. The entitlement is virtually
unconditional and it continues for up to
12 years after the property is
acquired.
The
most remarkable feature of BETR is that it
rides on top of TIF. If new equipment is
installed within a TIF district, the same
tax bill that entitles the owner to a
refund from the town is once again used
for a rebate from the state. The owner's
taxes are re-paid
twice.
Although
many forms of personal property have an
expected lifespan shorter than 12 years,
the business owner has no inducement to
limit or reduce its tax liability as long
as the BETR subsidy lasts. The owner in a
TIF district is actually paid to keep the
tax value high. The state must reimburse
the owner for all property taxes billed on
the equipment unless the State Tax
Assessor makes an effort to prove a lower
value. The owner has no incentive to
diminish the valuation for the first
twelve years of the property's life,
assuming the equipment lasts that
long.
As
new equipment is added to the BETR program
each year, costs to the state are
accelerating dramatically. Each major new
piece of equipment carries a twelve year
tail. The program is metastasizing. Within
a few years, the aggregate cost of
reimbursements will exceed everything that
the state collects from corporate income
taxes. In other words, the state will soon
be doling out to industry more money than
it takes in.
And
what do we get back for these investments
of precious revenue? Is there any
requirement that jobs be created in
exchange for the new investment? The
answer is no. If a company buys new
machinery to put 200 Maine people out of
work, the state will subsidize the
investment without giving it a second
look. How astute we Yankees
are!
The
BETR/TIF double dip is an infamous scandal
that deserves greater ignominy than it has
so far received. Although it has been
accurately described by a number of news
organizations, the issue is complex and
poorly comprehended by the public at
large. The program is staunchly supported
by the popular current administration; and
the Legislature suffers under heavy
lobbying from business interests to retain
both overlapping programs in their present
forms. In the meantime, the citizen
taxpayer is getting
nailed.
BETR
might well be "bettered" by any of the
following changes:
1.
Eliminate the BETR/TIF double
dip.
2.
Reduce the state's reimbursement to
less than 100%. A business that still
owes part of the tax will retain an
inducement to limit the valuation of
its property.
3.
Constrain the program to manufacturing
and research
equipment.
4.
Tie the credit to job creation or job
preservation
criteria.
5.
Adopt a period of reimbursement shorter
than 12 years.
Trends
& Conclusions
Maine's
current tax code produces annually about
1.9 billion dollars of undedicated
revenue. Less than 5 percent of this
amount comes from corporate income taxes.
Another few percent comes from business
franchise and other special
taxes.
About
85 percent is generated from two
fundamental sources:
1.
Taxes on the personal income of Maine
citizens--$733 million.
2.
Taxes on things bought by Maine
consumers:
general sales $690 million
tobacco 48 million
alcohol 21 million
the lottery 41 million
Thus,
state government is supported almost
entirely by the labor and consumption of
its individual citizens. Even some of the
business taxes are really consumption
taxes that are passed on in the price of
each product. Insurance premium and
utility taxes are good
examples.
While
business investment is part of what makes
it possible for our citizens to be
employed, to generate earnings and to
consume services and products, it is
strange that we impose the burdens of
taxation so completely on labor and
consumption and hardly at all on things
like resource extraction, pollution, the
value of capital and profits from
investment.
Owners
of capital respond by pointing to the
substantial taxes they pay on tangible
property within each of our local
communities. Over half of the taxes in
some of our mill towns are paid by the
foreign shareholders of the world's
largest paper
companies.
But
our policies on property taxation are now
running in the opposite direction. Real
estate in the unorganized territory, owned
by some of the world's wealthiest
corporations, produces only a dollar an
acre in taxes to the state. Half the land
area of Maine generates a paltry 8.3
million dollars in support of state
government, about 1/2 of 1 percent of what
is raised by personal income and
consumption taxes.
With
the advent of TIF and BETR, major
industries are paying less and less on
their municipal property taxes.
Homeowners, rent payers and small
businesses are left to make up the loss in
each community. At the state level,
citizens who pay sales and income taxes
are shouldering the burden of BETR
subsidies for industry.
Should
our state and local governments be
supported entirely by taxes on the
personal income of our citizens, their
purchases for personal consumption and the
value of the homes they live
in?
If
public servants are elected to office by
consumers, workers and homeowners, how
does the Legislature get away with
adopting tax policies that are so contrary
to the interests of those who do the
voting?
There
are many answers. For one thing, there is
no organization with political power that
represents in a general way citizen
taxpayers as consumers of products, as
payers of income taxes or as owners of
residential property. These interests are
diffuse and unfocused. They cannot compete
against a sharp-shooting lobbyist whose
single mission is to assassinate the tax
on a certain product, a class of property
or a particular source of corporate
income.
Taxes
are assessed against those who put up the
least resistance.
Political
popularity does not arise from looking at
the big picture or from thinking
idealistically about how the state should
raise the revenue it needs to do its job.
There is no reward for protecting the
interests of the state as a discrete
business entity or for guarding the
broader interests of average citizens who
are shareholders in the enterprise of
government.
How
many politicians knock on your door to
announce better ideas for raising revenue
that will enable the government to do a
better job? Few that I
know.
And
how many come to talk about a clever new
credit, an exemption or deduction that
will stimulate business, create new jobs
and make us all rich? They are
legion.
It
is just such a gambler's mentality that
controls our tax policy: If the state will
keep tossing more nickel and dime
concessions into the economy's slot
machine, we hope someday to hit the
development jackpot and retire from the
revenue fray. We are caged in these
illusory dreams by those who have the
power and money to create
them.
But
real life and real government does not
work that way. It is a plodding, difficult
process that requires courage, persistence
and day-to-day diligence, just as with
other businesses and
professions.
People
in public service should be skeptical of
easy answers and should scrutinize Maine's
tax policies with the same care that
astute managers in the private sector
guard and curry the revenue that sustains
each business
enterprise.
Politicians
are fiduciaries for the workers and
consumers who elected them. This public
trust should transcend political
expediencies.
Peter Mills is a trial attorney from Skowhegan and a State Senator from Somerset County who serves on the Taxation and Labor Committees.
