M.D. Harmon: Make Maine a better place to retire – get rid of the income tax

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It’s difficult to understand many things about the ins and outs of politics if you’re not involved in it every day.

People in Augusta and Washington do things that make many ordinary folks — especially taxpayers — scratch their heads and say, “Now, what were they thinking when they did that?”

And few things hereabouts occasion that sort of bewilderment more than this state’s historic tax policies and practices — that is, the ones generally set by Democrats, or at least the “progressives” (read: liberals) among their number.

Especially since the results of those policies are so self-evidently counterproductive at so many levels — including the punishment they impose on people who want to retire here. (I speak as one of those people; my wife and I both pulled the plug on full-time work in the past few months, and we’re seeing many things from a different perspective now.)

Still, it’s also rare that informed criticism of state tax policy gets such rapid verification as did an editorial published on this site last week.

Now, it’s true that as a free-lance writer, I am paid by the powers that be at the Maine Heritage Policy Center to send them a thousand words or so a week giving my thoughtful, considered views on issues of public policy.

And it’s also true that my outlook on those issues is in general agreement with the views held by the people who support and work for the MHPC.

Nevertheless, I’m a grunt, not a general, and I am not generally consulted when the organization takes a position. And I may agree or disagree with any given viewpoints published on this site. (Other than my own, of course. I tend to agree with most of those.)

Nevertheless, there is hardly a position taken by the MHPC’s worthies in recent years that I can more heartily concur with than the recent editorial calling on the state to move in a series of measured steps toward reducing Maine’s income tax to zero.

That even the first indications of such a move would stir business growth and investment is beyond dispute, not to mention the general sense of well-being and optimism it would generate among the hard-pressed working people of the state.

If done gradually, there would be time for economic growth to soften some of the impacts of the cutbacks such a course would impose on those dependent on state services. However, it would also create a new impetus toward differentiating those who truly need such services from those who have grown dependent on outlays without demonstrating such a need.

It also would recognize that we compete with states with lower tax rates than ours, and live right next door to one that has no income or sales taxes at all.

But it’s the impact on prospective and current retirees that’s my point this time, and the release of another survey in late April putting Maine at the bottom of the list — dead last — in the nation as a place to retire is what’s important now.

It’s bad enough that the website MoneyRates.com (slogan: “Make the most of your money”) dropped Maine from 28th in the nation last year to 50th this year based on a survey that weighted states by tax policies, climate, life expectancy and crime.

That site isn’t the only critical observer; Kiplinger’s rates Maine in its bottom 10 retirement states, too.

But it’s much worse that the new survey was featured prominently by AARP, the nation’s largest private organization serving retirees. That got the news prominent coverage, and told potential residents all over the country to look elsewhere.

True, Maine was average on life expectancy and right at the top on low crime rates, but those categories were weighted far less than taxes and climate, and Maine suffered greatly in both areas.

There’s not much to be done about climate (except hope global warming gets its act in gear), but taxes are entirely up to our discretion — and discretion hasn’t exactly been a hallmark of Maine’s political class in recent decades, when Democrats controlled the levers of policy.

We’ve been paying the price for that. As the editorial noted, “Maine lost people and their incomes to the nine states that have no income tax almost every year from 1995 to 2009. This works out to nearly 12,000 people and over $661 million in income lost. Conservative estimates show this out-migration cost state and local government over $87 million in revenue over this time period.”

And that doesn’t even begin to count the number of people who might have moved here (lots of people — like my wife and I — aren’t frightened by some snow and lower temperatures, especially if they are found in a place with great natural beauty) if AARP, Kiplinger’s and others wouldn’t have scared them away.

Maine, like many other states, doesn’t tax Social Security income, but offers only a measly $6,000 personal exemption on retirement income, where others don’t tax it at all.

So Maine has a window of opportunity to make a real impact not only within our borders, but also far beyond them.

Consider what might happen if, in 2014 or 2015, organizations like AARP and others were saying, “Maine has moved from the bottom 10 states for retiree-friendliness to the top 10.”

That would be something to brag about. It would also be something to profit from. All we have to do is, well, do it. And the time to start is now.

M.D. Harmon, a retired journalist and military officer, loves the state of Maine — especially since it’s no longer governed by socialists. He can be contacted at: mdharmoncol@yahoo.com

1 COMMENT

  1. What I don’t understand is , if this is true and I know it is, why isn’t Augusta, which is now Republican controlled, making it happen?  This is the most frustrating part to me!  We make a change in Augusta, yet, there is no change!

  2. Start with the death tax. Then the income tax. Don’t try to carve out pensions for special treatment – get rid of the whole mess.
     
    The poverty industry, the hundreds of non-profits dependent on high taxes, state workers, teachers and their unions, as well as rank-and-file liberals, the Democrat party and their mouthpieces in the press, will continue to fight their War on Maine and keep the Maine people in the fiscal dark-ages.

  3. In the past, the younger generation looked to “move back home to Maine” in order to be nearer the remainder of their family and retired parents as they became older.  That trend is now reversed as a higher percentage of the younger generation seek work outside of the state.  With fewer immediate family members living in the state, retirees are more inclined to move to other states to be nearer their adult children and grandchildren, who were forced to make such a move years earlier.

  4. Gov. LePage and the Republican majority ARE doing something: A.TAXES: 1)enacted the largest tax cut in Maine history–$150million for the first 2 yrs,$500million over the next 4yrs.  2). removed 70,000 lowest income families from the tax rolls 3). increased death tax exemption 4. 4).alloted $31 million to ease the tax burden of job creators
    B. welfare-1)no more sanctuary state,ended most benefits for legal non-citizens in Maine2),require drug test for welfare recipients convicted of drug crimes,sstrict sanctions for welfare rule violations,3)a 5 year cap on welfare eligibility.
    C–Budget: 1)paid $248mill. owed to our hospitals,2)reduced unfunded  state worker pension liabilities by $1.7 billion.
    D-Economic development—1)Legislature following the Gov.’s lead passed law to reform regulatory system,2)established a “red tape” hotline to make Maine more business friendly 3),reformed health care insurance to allow competition across state lines thus reducing the budon to job creation.

    How’s that for a start,Kympton. You can go to the Maine Government website to find out what else is in the works.

  5. Russell is right, but you can’t read about it because our print media is, you know, our print media. Dlbrt, both VT and Me. have watched NH take our money by the truck load and prosper with it for many. many years. Besides, “shut up and go along” has been the last words of many  free societies

  6. “Pay your taxes like the rest of us and stop crying about it!”  Really?  And continue to put up with the waste and fraud that has characterized Maine government spending for the past 3+ decades?  Continue to support the welfare haven that Maine has become?  Continue to support the lavish expenditures that so many Maine government bureaucrats weave into their little fiefdoms?  Protest against excessive, destructive taxes is an American standard – or used to be before the Liberal crowd teamed up with the opportunists such as Chellie Pingree and John Martin and began denigrating any and all who prefer realistic control of state spending. 

  7. Men and women died in wars to protect your freedom to make a buck!

    Man up and pay your taxes and stop whineing about it!
     
    Freedom ain’t FREE!

  8. How about a different slant.I am close to retirement age but for the good of the Maine economy, I think we ought to eliminate the tax on business income.  The job growth would be instant and voluminous.  The added personal income taxes collected might even cover the business taxes lost.

  9.  Dlbrt, our military men and women did NOT die to protect the government’s never ending, flagrant and destructive ability to stick a gun gun in our ear and demand ever more taxes for them to spend, waste and grow fat on.  “Making a buck” and keeping a few pennies of that buck from the maw of the government are two different things.

    You must be a State or Federal employee and/or union member.

  10. Hi!

    Will the elimination of the income tax be replaced with another tax or will the existing taxes such as the “unlawful” property tax be jacked up so high that it hurts the people, who so-called own their homes, such as the elderly on fixed incomes?

    Keep in mind that the Communist Manifesto contains 10 plancks, for ex., the elimination of private property (think property tax plus needing to get a permit to build a house or build an addition on the house. In other words, you are asking the “owner” for permission to build something.), a progressive income tax, an inheritance tax, etc., etc., etc.

    Did Thomas Jefferson or George Washingtion have to get a permit to build their homes or build an addition on their homes?

    Absolutely not!

    They actually “owned” their properties. If you own the property, then you have a right to build anything you want on it without having to ask permission of anyone.

    Check out the Communist Manifesto on the internet.

    Are you a practicing communist?

    Lise from Maine

  11. Wrapping an idea in red,white and blue and waiving it around doesn’t make it a good idea.

    In terms of a zero income tax plan, the problem with “just doing it” is that the revenues needed to run government programs must come from somewhere.

    Of course, there is an alternative: eliminate government.

    This is the logical extension of the anti-taxing mentality and it sounds an awful lot like anarchy to me.

    People forget that the Constitution they claim to be experts on begins with a preamble that contains more than “We the people…”

    The U.S. Constitution establishes and articulates six core reasons that our democracy exists (Maine’s Constitution has five, omitting, naturally, “to form a more perfect union”). Each of these goals envisions a community of interest in which the people, together, will engage. This community engagement requires that a government be constituted and the balance of the document gives the recipe for creating it.

    To eliminate income taxes in Maine while sustaining a viable government to assure these constitutional goals to the people, a plan must either eliminate 40% of government spending or increase tax revenues from other sources to compensate for the losses.

    So what’s the plan?

  12. So we want more people to retire in Maine?  We’re already demographically the oldest state in the nation.  A better approach might be to lure young people here and provide opportunities to retain them. 

    As the author so poignantly puts, “my wife and I both pulled the plug on full-time work in the past few months [i.e., have voluntarily entered semi-retirement and the concomitant reduction of income]” and “my outlook on those issues is in general agreement with the views held by the people who support and work for the MHPC [i.e., oppose taxes as a matter of ideology.”

    This self-serving work of political ideology obfuscates, not enlightens.

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