Capital Flight in Maine?
New data from the Internal Revenue Service suggests that Maine is experience a capital flight out-of-state. Capital income is defined as interest, dividends and net capital gains. As show in the chart below, between 1991 and 2002, Maine’s capital income per taxpayer was around 85 percent of the national average. However, between 2002 and 2008, Maine’s capital income ratio has plummeted 25 percent to 64 percent of the national average.
What may be behind this disturbing drop? According to my recent Maine Business InsideOut study, jobs in Maine’s commercial sector has been trending downward since 2002. In the end, the ultimate source of capital income is from a vibrant commercial sector. It seems that Maine is slowly losing both.