Commentary

BDN Wrong about Income Tax and Spending

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There’s an old adage that goes “If you have the facts on your side, pound the facts. If you have the law on your side, pound the law. If you have neither on your side, pound the table.”

Unsurprisingly, supporters of Maine’s income tax have already started pounding the table.

Such was the case in a recent editorial, where the Bangor Daily News Editorial Board attempted to bash the Maine Republican Party and their upcoming effort to eliminate Maine’s individual income tax.

Although the BDN Editorial Board did not go as far as explicitly opposing eliminating the income tax, they did insinuate that cutting taxes in Maine might not be an easy task because of our state’s alleged love of government spending.

They proclaimed not only that “Maine has and expects a lot of government — not bureaucrats sitting in offices but services and infrastructure paid for through tax dollars,” but also highlighted transportation and education as examples of big government that Mainers supposedly expect.

However, there are several problems with the BDN’s argument in support of government spending, including:

Mainers DON’T expect “a lot of government”

The BDN Editorial Board made the bold claim that Maine “expects a lot of government,” yet failed to cite any statistic or evidence to support this argument.

Perhaps they were unable to back this claim up because it’s simply not true.

Mainers don’t demand or want big government, no matter what it is spending money on. They want a streamlined, minimal, and efficient government that doesn’t unnecessarily collect and spend tax dollars.

According to a 2013 poll, when Maine was faced with a budget deficit, nearly 60% of Mainers would have chosen to cut services and spending in order to get the budget back on track. And 65% of respondents agreed on some level that the budget woes were caused by problems with spending.

While Mainers clearly expect a basic level of public service, to generalize and assert that the entire state of Maine expects “a lot of government” is completely misleading.

Most of our state budget goes towards welfare

Although the BDN Editorial Board mentioned transportation and education as examples of government spending, they failed to mention welfare spending, which unsurprisingly makes up the bulk of our state budget.

As shown in The Maine Heritage Policy Center’s recent report, “How Does New Hampshire Do it“, in 2013, the Maine state government spent over $3.5 billion or nearly 40% of its state spending on what the U.S. census department calls “social services and income maintenance” expenditures, or more generally, welfare.

Compare this to New Hampshire, which has roughly the same population as Maine. In 2013, New Hampshire spent just under $1.9 billion in this category, which is nearly $1.7 billion less than what Maine spent.

To put that into perspective, if Maine aligned its welfare spending with New Hampshire, it could easily eliminate its income tax, and still have money left over.

I doubt many Mainers would expect “a lot of government” if they knew this fact.

Transportation spending is not the primary reason Maine has an income tax

As mentioned before, the BDN Editorial Board used transportation as its first example of the type of spending that Mainers demand.

While Mainers certainly demand roads and the ability to travel throughout our state, it’s wrong to insinuate that transportation is a reason we should have “a lot of government” or an income tax.

Transportation spending is just a fraction of our state budget, and not nearly large enough to justify an income tax. In fact, in 2013, it accounted for just 6.7% of state spending in Maine.

And New Hampshire, which the BDN points out has just half the number of state owned roads per 100,000 residents, only spent about 16% less on transportation at the state level.

Maine’s transportation needs are clearly not a complete anomaly that require excessive levels of taxation and spending.

Education spending is also not why Maine has an income tax

The only other example of spending that the BDN Editorial Board cited is education spending.

While Maine does spend an above average amount per pupil (mostly because of its high number of schools) this is still not a major reason for Mainers to expect “a lot of government.”

In 2013, the Maine state government spent roughly $1 billion on education. Not only is that less than the revenue brought in by the income tax, but it is was just 11% of Maine’s total state spending.

The BDN correctly seemed to hint at one sad fact of Maine policy making; cutting spending has proven to be very difficult. But it’s not because Mainers demand high levels of government spending.

It’s because misconceptions regarding the amount and negative consequences of government spending are allowed to exist in the political dialogue. Liberal policy makers, and members of the media, rarely inform the public of the true cost or impact of government spending.

They instead promulgate misleading arguments and statistics, and make cutting spending or decreasing the size of government seem to be unnecessary or impossible.

However, curbing spending is not only possible, but it’s a worthwhile endeavor that must be pursued. Maine needs to trim the size of its government if it wants to be competitive and keep growing its economy.

And contrary to what the BDN Editorial Board is saying, there is no universal desire for “a lot of government” that might make it difficult to eliminate the income tax.

But I don’t except them to stop pounding the table on this issue.

About Patrick Marvin

Patrick Marvin is a former Policy Analyst for The Maine Heritage Policy Center. He holds a Masters Degree from the University of New Hampshire, and has an extensive background in analysis and research.

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