Since the upcoming Universal Home Care (UHC) initiative sponsored by the Maine People’s Alliance (MPA) achieved ballot status, the MPA, its allies and their friends in the media have been spreading misinformation to downplay the devastating impacts of the measure.
When the MPA learned its proposal would appear on the November 2018 ballot, they told media the initiative would provide in-home care services to elderly and disabled Mainers by generating $132 million in new tax revenues—a figure that is so patently false, Mainers should be concerned about whether the misinformation campaign began while initiative petitions were still in circulation.
In Maine, the Office of Fiscal and Program Review (OFPR) is responsible for crafting fiscal impact statements to be included with each initiative petition while it is in circulation. Any voter who signs a petition has the ability to view the fiscal impact statement prior to signing. The fiscal note created by OFPR estimates the Universal Home Care initiative will generate $310 million in new tax revenues, not $132 million.
In other words, the MPA had access to the fiscal impact statement in October of 2017 when they reportedly began collecting signatures, but still told reporters their initiative only raises taxes by $132 million. What else would you expect from such an upstanding organization?
On its face, the $132 million figure is a ridiculous assertion. In 2016, Maine voters narrowly approved Question 2, which imposed a three percent surtax on incomes earned over $200,000 to bolster funding for k-12 public education. Supporters of Question 2 claimed it would generate up to $370 million.
The Universal Home Care initiative imposes a 3.8 percent tax on wage and nonwage earnings over the income threshold subject to Social Security taxes, which is $128,400 in 2018. I cannot explain the logic behind how this tax – assessed at a higher percentage and on a lower threshold of income – supposedly generates less revenue than Question 2 in 2016. I will leave that to the MPA.
The UHC initiative’s supporting cast has also tried to mislead voters over who exactly will be subject to the taxes established under the measure.
In April, House assistant minority leader Ellie Espling penned an Op-Ed critical of the initiative in the Portland Press Herald that read, “The proposal places a 3.8 percent tax on families in Maine making over $128,000.” However, days later, the Press Herald changed the word “families” to “individuals” and printed the following correction:
“Correction: This commentary was corrected on Wednesday, April 11, at 11:49 a.m. to correct an error regarding who would be subject to the proposed 3.8 percent employment tax.”
There’s just one problem: Espling’s words were entirely factual as originally written.
While Secretary of State Matthew Dunlap was accepting public comment on the final language of the initiative, Maine Revenue Services issued a technical analysis of the UHC initiative. Despite the Press Herald’s “fact-check,” Espling’s comments have been validated by the agency charged with administering tax policy in the state of Maine.
Public comment submitted to the Secretary of State from the Department of Administrative and Financial Services includes the technical analysis conducted by Maine Revenue Services (MRS) which states,
“Thus, a couple filing a joint federal return will file a Maine married joint income tax return, reporting their federal [adjusted gross income] that they reported on their married joint federal return, and the computed Maine income tax, including the additional 3.8% income tax imposed by this bill, is the joint and several income tax liability of each of them. Thus, for the two income tax provisions in [UHC intiative], federal [adjusted gross income] filed, and thus [modified adjusted gross income], includes the income from both spouses filed on a joint return basis, with no provision of state law allowing their separation.”
For all three tax provisions assessed under the Universal Home Care proposal, modified adjusted gross income includes the income of both spouses filed on a joint return, according to MRS.
Maine Revenue Services also found a number of issues with other aspects of the proposal. For instance, MRS found no exception within the bill for federal, state, or local government employers, meaning state and local governments would be required to pay the employer excise tax (1.9 percent) assessed under the initiative (the federal government would still be exempt). Similarly, MRS found no exception for nonprofit employers.
These are just some of the many flaws of this proposal, all of which exemplify the absurdity of crafting complex tax policy at the ballot box.
Unfortunately, it is real Maine people who suffer when policies are enacted this way. The out-of-state interests that push these half-baked proposals – like George Soros, who has bankrolled this initiative from the beginning – will never have to face the consequences.