Franklin Countys First News

Politics & Other Mistakes: Tax reform made simple

Al Diamon

Here’s the hard truth about taxes: You’re gonna pay them no matter what.

It doesn’t matter if you’re rich or poor. It doesn’t matter if you’re a person or a corporation. It doesn’t matter if the state decides to emphasize taxing income, sales, property, liquor, tobacco, inheritances, excises (whatever they are) or the air that you breathe. Someway, somehow, directly or indirectly, you’re gonna pay up.

Now that we have that out of the way, we can have a nice, calm discussion about the best way for the government to extract money from you. By “best way,” I don’t mean the method that’s least painful (there is no such method), but the one that gives the state the best chance of establishing a reliable source of revenue, one that isn’t unduly disrupted by recessions or crazed presidential tweets. And it would be reasonable if the tax system weren’t so onerous as to inhibit economic growth and individual initiative (although it almost certainly will).

Having established these ground rules, we can safely conclude that all tax systems are horrible. Shift the burden around any way you like, but you can be sure somebody is going to get screwed. The most you can hope is it won’t be you.

You will be wrong about that.

That’s certainly the case if advocates for local-option taxes have their way.

In the 2019 session, legislators will again consider a bill allowing municipalities to impose a 1 percent sales tax on top of the current 5.5 percent state sales tax. This isn’t the first time this idea has been floated. It went nowhere in the last Legislature. And the one before that. And virtually every Legislature since shortly after the invention of hogwash.

As always, supporters of this plan are touting it as a way to reduce property taxes. Portland Mayor Ethan Strimling, whose city stands to collect an extra $16 million if the idea is approved, told the Portland Press Herald, “[The property tax] doesn’t allow us to export the burden we have to tourists, and having a municipal-option sales tax allows us to reduce the burden on the property tax when we have to raise money for schools or raise money for roads and everything we’ve got to get done.”

It’s easy to understand why Strimling feels this way. During his tenure as mayor, he’s called for increased spending on almost everything, including his salary. It has yet to occur to him that property taxes would be significantly lower if the budgets he supported weren’t so bloated.

Nevertheless, the mayor has a point. The property tax is regressive and bears little relation to ability to pay. Of course, the same could be said of the sales tax. But the property tax also supports lots of stuff that has relatively little to do with owning property, such as schools and county government.

So, let’s fix that.

If the state paid for all basic education services (with cities and towns at liberty to spend more if they wished), property-tax bills would decline by as much as 50 percent. If county government were abolished and its programs transferred to state government, you could knock another 10 to 15 percent off your tax bill. Suddenly, property taxes would be a non-problem.

Of course, there’s still that little matter of finding the money to pay for registries of deeds and advanced calculus classes. But there’s a simple way to do that, and it’s one Strimling and his local-option cohorts already embrace:

Soak the tourists.

Maine’s sales tax is narrowly focused, relying primarily on vehicle sales and purchases of home construction and improvement materials. It’s way past time to apply it to all forms of frivolity. Tickets to amusement parks, ski slopes and movie theaters aren’t taxed. Neither is the cost of having somebody clean the camp those out-of-staters are renting for the weekend. In fact, virtually all services from legal fees to house painting to pet grooming aren’t subject to the sales tax. It’s well past time they were.

This type of tax reform would be somewhat fairer than local-option taxes, which mostly benefit the largest municipalities. Sure, you’d pay more sales tax, but your property tax bill would be lower. If you rent, your landlord would have less incentive to increase what he or she charges. And tourists would finally be contributing a significant share of governmental costs.

Would somebody still get screwed? We’ve already established that they would. But it might not be you.

Although, it probably will be.

You have the option of emailing me tax-free at aldiamon@herniahill.net.

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30 Responses »

  1. In the history of government, I know of no instance where any new tax stream actually reduced an existing tax stream. Once a new tax stream is in place, government is only too happy to expand expenses to use that revenue. The local option sales tax will be the same, with the added benefit/detraction of pitting towns against each other in competing for retail dollars as consumers save taxes by shopping in a different locality. Until government cuts spending by reducing the scope of services to meet reasonable (reduced) revenues, the tax burden will continue to increase. Most Mainers' salaries and incomes are not increasing at the same rate as government spending, but legislators don't seem to care about that math.

  2. Al, you are onto something. For once, you are using common sense. I must admit, i agree with you on this
    Idea. Apply the sales tax equally to all activities and purchases, especially those expensive hobbies like golf
    And skiing. The tourist flock up here to enjoy our state....lets tax the crap out of them. I know this will cause
    Many republicans to think i have fallen off the "no new taxes" wagon, but lets be logical for once. This state
    Is chock full of liberal givers and layabout takers and the liberals are in full control now and they are gonna
    Spend spend spend like there is no tomorrow. Soooooo...in order for thd rest of us worker payers to survive
    We have to find another income source. I say give em hell legislature!!!! Charge sales taxes on everything and
    Use that money to pay the full costs of education and county government and jails, etc. And i would like to
    Make one additional suggestion for another income source. Raise the tolls on the interstate by 200% and
    Provide a rebate for any state resident on that additional toll money (receipts filed with state tax return for
    The rebate). That way we get ALOT of extra money from the tourists. I can tell you that most tourists don't
    Care about tolls or sales taxes when they are on vacation in Maine. I speak from my own experience as i was
    Once a tourists myself. After i attended college at Orono, i joined the US Air Force and ended up living in
    Florida for 16 years. I traveled back to Maine 2 times per year for long vacations with my family and i was
    Happy as hell to spend my hard earned money allllllllll over the state. I never once complained or worried
    About taxes or tolls or what anything costs me. I spent my money and enjoyed my home state.

  3. William makes an excellent point. In my previous comment, i am in no way suggesting that the government
    Should expand with those new taxes. I am for smaller, much smaller government!!!! Butttt...i live in the real
    World and i know that smaller government may never happen. Sooooooo....let's use that extra money to give
    The hard working taxpayers a real break and lower their property taxes, hopefully significantly!!!! And get rid
    Of the excise taxes on vehicles too!!!!!!!!! Let's give the hard working Maine taxpayers a break!!!!

  4. Swapping a pain in the ass for a pain in the neck is going to go nowhere. We are still taxed, Al is right about that. And it never stops there, ever. Schools are cancers, the more they get, the more they want. We could give a single rural district a half a billion a year, and still they would want more. This is Maine after all, our state is big, our population isn't, it ranks 10th on the least populated list, and our population isn't rich, while our median family income is $72,000 just $1700 below national median income, we still can't compete with the heavier populated states in the realm of education spending. That is a fact the people have to realize. What kids learn hasn't changed all that much. $50,000 a year for a salary is completely unacceptable, especially when we are picking up the tab on 86% of their medical insurance and providing them with a retirement package that is better than the feds provide from social security. If Mills and house leftists have their way, ALL taxes will go up. And the individual municipal sales tax should it pass, will only hurt local bottom lines, because people will just go shop at places that don't have the tax, kind of like sales tax and online shopping or cigarettes and alcohol and New Hampshire.

  5. Actually hrtlss we the tax payers cover 100% of health Insurance for teachers and admin. Their actual bring home is around $34k for first year teachers and it goes up every year. You’re also correct if they had a billion it wouldn’t be enough.

  6. Hrtlss, you’re acting just like a democrat, unwilling to compromise. How is it not better to tax tourists as opposed to landowners? And tax ALL landowners fairly; why should a tax paying landowner that doesn’t attend any church have to subsidize them?

  7. Charlie Webster is right again, he once said if you send it to Augusta, there going to spend it. We need to figure out how to not send it to Augusta.

  8. @Hrtlss Bstrd, if you take southern Maine (Portland and surrounding area) out of that $72,000 average what would you have?

  9. I have heard that soon-to-be-Gov Mills is bringing poetry back to the inauguration ceremony. To that effort, here’s my contribution, which can serve as a handy summary of the next four years.

    Rose are red,
    Violets are blue,
    Sugar is sweet,
    Let’s expand Medicaid and hike every tax we have and even those we don’t have - yet - and only after we’re out of office will the bill come due.

    No, no. I don’t want to be paid for this timeless poem. And that’s the only money we’ll save for the foreseeable future.

  10. Captain, you mentioned Churches being "subsidized".
    Good question.(I don't like paying my taxes either).
    In our church, we do what we believe we are supposed to do. Help our fellow man. (Those in need).
    This takes a lot of time and money that we dutifully pass along from the blessings that God provides to us. We don't get paid money for our time, We Thankfully do what we can.
    I can assure you that we do not push people on to welfare but are convinced there is a greater source of support in the hands of God. And he expects us to show our faith by stepping up to help them. It is usually not pretty work.

    Often, we get calls because social workers encouraged them to "call the churches" for help.
    We also see the lazy takers who have no intention of "trying".
    We see the drug and alcohol addicts who have lost everything and everybody in their lives.
    We see families and people who (thru no fault of their own) need temporary help but they fall between the cracks of state aid.
    There are very tough decisions to make about exactly what to provide in each case.

    Everything we do is an expense the State does not have to incur.
    I work full time, own property, pay taxes for everything, pay tithes and offerings as I feel led and give of my time to help.
    I'm in it with you about welfare fraud and distribution.

    Now if we get a call from a disgruntled tax payer who owns land asking us to pay his property taxes,,,, I think we could have a good discussion about some of the frustration.

    BTW,, if they closed down everything brick and stick building , it would probably make the church stronger. No worries.

  11. Captain Planet, Churches get no money from any government, they also don't pay any in either, but we also hold schools, hospitals, town offices, city halls and transfer stations, nonprofits and town, city and state held property to the same standards we hold churches too, except we actually do subsidize schools, hospitals,town offices, city halls and transfer stations, and other nonprofit or town, city or state held property.

    Mom of 2, Teachers actually pay 18% of their health insurance, they used to pay 16% but it went up 2 points when they agreed to the $40,000 for 3 years then $50,000 after that, maxing out at $65,000 after 30 years.

  12. Thank you for the info Hrtlss. I’ve been misinformed I guess.

  13. Helping the tax base would be ‘a good investment’ for everyone. And hrtlss, if the state suddenly told me I never had to pay property taxes again wouldn’t you feel I was being subsidized unfairly? Schools and hospitals benefit all, not just the downtrodden.

  14. Captain, I consider myself the happiest person on your planet. Love my church and my life.
    I'm sure you have your reasons for your words but,, sorry bud you got it wrong on this one.
    Nothing downtrodden here.

    I could even say I love you but something tells me you wouldn't believe it...ha.

    If the charity work of all the churches (and many other agencies)was to stop,, social services costs would skyrocket and so would your taxes. Or there would be no place for downtrodden folks to get help.
    I understand that would not bother some, and I would struggle with that.

    Let's demand frugal government spending.
    Waste not want not "usually" works.

  15. Best idea. Give the big univ and church endowments an annual $billion$ tax free, but then tax the devil out of everything beyond that.
    Bowdoin College endowment reaches $1.63 billion. ... BRUNSWICK, Maine — Bowdoin College reports that its endowment grew 15.7 percent during fiscal year 2018, the largest increase of any school in the country. On June 30, the endowment was valued at $1.63 billion, the college said in a release.
    Harvard University's endowment (valued at $37.1 billion as of 2017)[1] is the largest academic endowment in the world.[2]
    Organization Worth Country
    Catholic Church $140 billion + Vatican
    The Church of Jesus Christ of Latter-Day Saints $67 billion + United States
    Church of England $7.8 billion United Kingdom
    Opus Dei (part of the Catholic Church) $2.8 billion Italy

  16. BEST idea: Give the big universities and churches an $billion$ to make money on and then tax whatever is over.
    Bowdoin College endowment reaches $1.63 billion. ... BRUNSWICK, Maine — Bowdoin College reports that its endowment grew 15.7 percent during fiscal year 2018, the largest increase of any school in the country. On June 30, the endowment was valued at $1.63 billion, the college said in a release.
    Harvard University's endowment (valued at $37.1 billion as of 2017)[1] is the largest academic endowment in the world.[2]
    Organization Worth Country
    Catholic Church $140 billion + Vatican
    The Church of Jesus Christ of Latter-Day Saints $67 billion + United States
    Church of England $7.8 billion United Kingdom
    Opus Dei (part of the Catholic Church) $2.8 billion Italy

  17. When the Roman empire went into steep decline in the third Century, it looked like it would fail. The Emperor Diocletian (286 - 305) revived the Empire with reforms that give it new vitality. But he also massively increased both taxation and government presence. Before, most citizens of the Empire would never pay a tax, see a Roman soldier, or notice Rome's rule - even as they benefited from the stability it brought. After Diocletian the government was everywhere, as was taxation. That ultimately was a sign of weakness, and though Diocletian and Constantine extended the empire's life, the weakness was clear. Why this forray into history? Because I agree with the conservatives on a very important point - too much government and too much regulation is a bad thing, and leads to social and political weakness.

    But the answer isn't to just get rid of taxes, but to look at how everything is structured. Right now regulations, tax policy and the government is geared to serving those who have power and money. Workers make less money than before, the wealthy have made out like bandits (especially the top 0.5%) I truly believe that there is an opening to appease both the left and the right - reduce taxes and regulation, and increase protection of workers and the poor. The key is to recognize that one group - the very wealthy - is benefiting from both big government and our tax code. They use emotional issues like abortion, foreigners, and claims the poor are buying tattoos and booze with tax money to hide the fact they are rigging the system. But they are the reason for big government and high taxes on average folk. We need smaller, more local government. We need fewer regulations. But we won't get that unless we stop big banks and big business from controlling the government.

  18. Funny you think that if your organization had to pay taxes it would stop being charitable. I’ve given to charities most of my life yet I still pay my property tax.

  19. Let's not forget big college. College tuitions have risen faster than most any expense. Student debt is crippling our younger generation. We constantly hear about big pharma, big oil, big banks. Never hear much about big college. Except for let's make it "free". When taxpayers foot the bill, it's not free people. A solution to the taxes, a flat tax. No deductions, no exemptions. Just a flat percentage. Say.... 10 %.after the first 10000. make 50000 pay 4000 make a million pay 99000 no loopholes nobody rides for free. The government would receive more than it does now. But no more talk of "fair share".

  20. Captain, You need to learn the definition of subsidy. No tax money, from any tax funded entity, goes into a church. and if it upsets you that much, have yourself ordained as a minister of your own religion, and declare your house your "church" and you will have tax exempt status as well, of course with that comes some real pitfalls, no medicaid/medicare, no social security, no government aid whatsoever that is what is called the separation of church and state, church doesn't pay the state, state doesn't pay the church.

  21. Rich politicians will never allow a flat tax, it would hurt their bottom line. And Al’s party would wail that is discrimination against the poor. Great idea though!

  22. Capitan said,
    "Funny you think that if your organization had to pay taxes it would stop being charitable."

    Did anyone say that on here?

    Render into Caesar the things that are his.

    Well,, happy trails everyone.

  23. Whoa, whoa, whoa !!! You re all being fooled to think this is Mr. Diamon who has shed his vitriolic, exceedingly nasty, outrageous attacks on Republicans, to actually seem a bit rational. It cannot be him. This essay is too balanced.

  24. Watching the news this morning and seeing the new Governor talk about expanding medicaid. Disturbing to say the least. We will start paying for it with a tobacco lawsuits money then we will see how its going to be paid for with her budget proposal in a month or so. Hope I’m wrong but I don’t see any reform coming just more more more !!!!!

  25. Democrats won. Stop fighting. Let them tax the living **** out of everyone and everything. New worker? Sorry, you get $200/wk, even making $15/hr :) College prof? Ok - you pay 50% of your income...

    Let them destroy your traditional culture in CD2, take your firearms (Sauschuck is coming to head state police...he's on the board of an anti-2nd Amendment gun control group, after all). Enviro nut laws are sure to follow, don't worry! Probably Zero open burning in the state, and no wood heat...

    Let's allow Maine to LIVE the Progressive dream they voted for - yessah! STOP fighting it! If you are opposed, you didn't show up to VOTE. Don't b*tch now.

    4 years might be educational. Tough love. I'm all for it.

    I'm even changing my party affiliation...to Democrat! It's easier to effect change from within ;)

  26. Eliminate the income tax and pass a sales tax on all retail sales I would be on board.

  27. I have to say this proposal is virtually identical to what Paul Lepage was advocating for over the last 8 years. It make sence now and it made sence then.

  28. Do away with county government? If we did away with state and local government, go to a county based system and redefine obsolete county lines to keep pace with population centers you would then be on the road tax reform. A town office, fire station, police station, and school superintendent every 10 miles is overkill.

  29. @Nerf...I take it you aren't retired! An increase of any tax that is not based on income would hurt us seniors that have paid income taxes for 30-40 years.

  30. Thank you Old Maniac.

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