Commentary

Tax Hike Referendum Harmful to School Funding

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A cone was excavated by the French at the site of ancient Lagash, a prehistoric city located in Mesopo­tamia. The messages on the cone were etched with a reed stylus on soft clay by Sumerians during the third mil­lennium B.C. This cone is now displayed at the Louvre Museum in France.

The words inscribed on that cone are “freedom from taxes.” The nature of taxation thus revealed itself at the very dawn of history, and the early disclosure on the cone confirms that “taxes are easy to increase but almost impossible to decrease,” bringing me to a referendum question that leaves me with a very sour taste in my mouth.

Proponents call it the “Stand Up for Students” referendum. I call it what it is – an unfair tax on the rich by people who have no qualms taking what rightfully belongs to one individual to benefit another. Or, in simple terms, legalized plunder.

The income tax seems to have become a free-for-all to satisfy whatever some perceived do-good purveyor of social justice deems financially worthy of your money, whether you think so or not. Much to my dismay, the referendum process has also taken a similar path in Maine, but that is another story.

In March, the Secretary of State’s office verified nearly 67,000 signatures, which authorized the “Stand Up for Students” initiative for the November ballot. If successful, the referendum would put a three percent surtax on any income over $200,000 annually, supposedly generating a $157 million windfall annually to benefit public education.

This may sound peachy keen, but paint me a skeptic. I believe that this referendum question will backfire. Instead of making sure our schools are properly funded, we will see some serious capitol flight from those evil rich people that I happen to appreciate – you know the ones that actually foot the bill for many, if not most of the programs and services in Maine. We will see revenue decreases and be left scrambling to find funds to cover a myriad of other programs and services, never mind education.

Pro-growth tax reform that reduces the burden of personal income taxes would generate a more robust economic climate and put Maine on a higher growth trajectory, with more investment, more employment, higher wages and a higher standard of living, thus creating more revenues to finance our schools.

Empirical studies of taxes and economic growth indicate that there are not a lot of dissenting opinions coming from peer-reviewed academic journals. More and more, the consensus among experts is that taxes on corporate and personal income are particularly harmful to economic growth, with consumption and property taxes less so. Economic growth ultimately comes from production, innovation and risk-taking.

When Maine’s income tax for top earners is 10.15 percent, which the Maine Department of Administration and Financial Services says would be the second-highest top marginal income tax rate in the country, why would wealthy individuals want to stay here?

If it were me, I would pick up my ball and find a better playing field.

About Beth O'Connor

Representative O'Connor represents House District 5 including the towns of Berwick and North Berwick (part). She can be reached at (207) 289-9047.

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