Mainers: Taxes Hurt the Economy


by Jason A. Fortin
A recent poll conducted by Rasmussen Reports revealed that Mainers, at a rate of nearly 4 to 1, believe that tax increases hurt the economy. Of the 500 interviewed Mainers, 59 percent to 15 percent revealed their belief in the negative effects of increasing taxes.
This result should come as no big surprise to policymakers in the Pine Tree State. For years, Mainers have lived under one of the highest, if not the highest, state and local tax burdens in the country. MHPC’s Scott Moody calculates Mainer’s state and local taxes as a percent of personal income to measures 12.8 percent. Maine’s ranking is second to New York, which is 13.1 percent.

And according to the Tax Foundation’s Tax Freedom Day analysis, in 2005, Mainers had the highest state and local tax burden at over 13.5 percent of $1000 dollars of income.
Not coincidently, Maine’s economic and income growth has trailed the nation. In March, the Bureau of Economic Analysis (BEA) released State Personal Income 2005. The analysis revealed that nationally, from 2004-2005, per capita personal income grew at an average rate of 4.6 percent. During that same time period, Maine was among the states with the lowest per capita income growth rates, ranking 42nd with 4 percent growth.
The poll reveals that Mainers are becoming increasing aware of the detrimental effects high taxes have on economic and income growth. As this awareness grows, Maine policymakers should be held increasingly accountable for the high tax burden. Future income and economic growth of the state depends on that scrutiny.