Commentary

Question 2 Is Really About Raising Taxes in Maine

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Ancient wisdom assumed that any bird would have sense enough to avoid a trap set right in front of it. The Maine AFL-CIO, Maine Education Association, Maine Parent Teacher Association, Maine State Employees Association, Maine Small Business Coalition, Maine People’s Resource Center and the Maine People’s Alliance (MPA), in contrast, are betting that the average Maine voter’s intelligence falls well below the Biblical bird-brain standard.

If their gamble succeeds, the “Maine Public Education Surcharge Initiative” will pass on November 8.

The official ballot summary sounds harmless, even beneficial: “This initiated bill establishes the Fund to Advance Public Kindergarten to Grade 12 Education for the purpose of improving the ability of the State to reach the annual target of 55%, as specified in statute, for the state share of the total cost of funding public education from kindergarten to grade 12, and for increasing direct support for student learning rather than administrative costs. Revenue for the fund is generated by a 3% surcharge on Maine taxable income over $200,000, beginning with tax years beginning on or after January 1, 2017.”

To grasp what’s going on here we must set aside the sucker-bait about the little kiddies and hints of property tax relief, better teaching, etc. and focus on the key phrase: “Revenue for the fund is generated by a 3% surcharge on Maine taxable income over $200,000…” And consider the organizations financing and promoting this initiative.

The MPA, with its front group, the Coalition and Resource Center, is committed to one central goal: expand government and diminish everything outside government. The other parties expect direct material benefits from increases in government revenue.

So there it is. The net spread before our eyes: RAISE TAXES.

Every so often the government-growers let slip the fact that their hopes and dreams will require tax increases for anyone with any kind of income, but they never dwell on that goal, much less emphasize it. The strategy is always to point an accusatory finger on one hand at the wicked rich while picking middle class pockets with the other hand.

Consider Maine’s history of taxing the rich. In 1969 Augusta enacted a state income tax with a marginal rate of 6% on incomes over $50,000, 5% on those earning between $25,000 and $50,000, 4% for those between $10,000 and $25,000, 3% between $5,000 and $10,000, 2% between $2,000 and $5,000.

What could be fairer than that? Maine’s rich folks pay 6% if their income above $50,000 while those in the bottom tier pay a trifling 2%. Forty years later people in the bottom tier found themselves paying 8.5%.

Numbers are boring, and often used deceptively, but the bare facts are indisputable. In 1969 $50,000 equaled $290,476 in 2008 dollars, at which point the top bracket had risen to 8.5%. What had been $3,300 in 1969 dollars had become $19,000 in 2008. That is to say the lowest tier of taxpayers was paying the same rate as the highest tier.

This is easily explained. The legislature raised the top rate while inflationary “bracket creep” boosted ordinary working class Mainers into the top rate. In 1982, a Republican named Charlie Craigin followed President Reagan’s lead by promoting and helping pass a referendum to index tax rates to inflation, ending bracket creep. The legislature almost immediately overturned the reform and bracket creep resumed.

The motive isn’t hard to figure out. With bracket creep, legislators get more money to spend without ever having to openly vote for a tax increase. This fulfills the dream of every true politician; power without responsibility.

But a legislator’s lot is not always a happy one. He passes laws again and again in expectation that people will have no thought other than to understand and obey his intentions. Tragically the people repeatedly betray him by consulting their own self-interest first and foremost, repeatedly disregarding the dreams of their political masters.

In the liberal dream world, taxpayers will respond to tax hikes like hamsters, spinning their little treadmills faster and faster, trying to keep up their purchasing power, hence paying more taxes as they ascend from bracket to bracket. In the dreary real world, the rich climb into their limousines, yachts or Gulf Stream jets and depart for Florida, New Hampshire and other happier tax climates. The middle class finds ways to deal under the table and out of sight whenever possible. The poor lapse into the ranks of welfare recipients.

Final result: the cost of those benefits from government “investments” will fall on the shoulders of those taxpayers who can’t find a way to escape. What’s sadder is that the benefits will prove deceptive or illusory, except for members of those organizations which are forever promoting the will-o’-the-wisp called “tax fairness.”

[I know many readers hate fancy talk, but I can’t resist. The Latin for will o’ the wisp is Ignis fatuus—“fatuous light.”]

About John Frary

Professor John Frary of Farmington, Maine is a former US Congress candidate and retired history professor, a Board Member of Maine Taxpayers United and publisher of www.fraryhomecompanion.com and can be reached at: jfrary8070@aol.com

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