April 24, 2019
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Financial newsletter ranks Maine among least tax-friendly states

AUGUSTA, Maine — A day after Maine Republicans were touting a decrease in the overall tax burden for most Mainers — based on a report by the nonpartisan Truth in Accounting think tank — another report shows the state is still among the worst for overall tax burden.

On Tuesday, the iconic American financial newsletter Kiplinger released an online interactive tax comparison for the 50 states, and Maine found itself among the 10 “least tax-friendly” states in the nation.

Monday’s report, which suggested the overall tax burden was down by 41 percent on average for Maine’s taxpayers, was good news for Maine’s Republican Gov. Paul LePage and his allies, who have pushed through some of the largest income tax reductions in state history.

And the latest Tuesday from Kiplinger reiterated LePage’s long-standing position on reducing taxes, including a push for a statewide ballot question to eliminate the state’s income tax entirely. LePage and his supporters have also advocated to eliminate the state’s estate tax without success, so far.

“Over the next year, millions of Americans will move to a different state — for all sorts of reasons,” Robert Long, managing editor of Kiplinger.com, said in a statement announcing the new map. “From young professionals moving across the country for a new job to working parents moving a state over to find a better home for their family, the Tax Map provides a valuable tool to people of all ages, backgrounds and career stages.”

The states deemed the most tax-friendly by Kiplinger have neither an income tax nor an estate tax or their top income tax rate was less than 5 percent.

“Tax-friendly” Arizona, for example, has a 5.6 percent sales tax only slightly higher than Maine’s 5.5 percent but its top income tax rate is set at 4.5 percent compared to Maine’s top income tax rate of 7.95 percent. Maine’s top rate is due to drop to 7.15 percent in 2016.

On Tuesday, Rob Poindexter, a spokesman for House Republicans, said both reports were valid and the Kiplinger report only reiterated what House Republicans were saying Monday — that while it was good that Mainers’ overall tax burdens were decreasing, the state still has a long way to go.

“Our burden is less, thanks to reducing the debt the state owes through pension reform, repaying hospitals and not expanding Medicaid,” Poindexter wrote in an email message to the Sun Journal, “But there’s still a long way to go before we are where we need to be. As we said yesterday, and (Robert) Frost so eloquently put it, ‘we have miles to go before we sleep.'”

Peter Steele, a spokesman for LePage, said reducing Maine’s tax burden for individuals and business has been a key goal of his boss for the last five years but an argument that’s been partially ignored in the Legislature.

“Taxes matter in people’s lives, especially the income tax and the death tax,” Steele said. “Even if they can afford to pay high taxes, why should they stay in a state that penalizes them for working hard? They can simply move to another state and keep more of the money they rightfully earned.”

Steele said LePage is insistent on reforming the tax structure in Maine because the governor believes it is one of the keys to attracting business investment and good-paying jobs to the state.

“Until legislators get serious about fixing our state’s punitive and outdated tax structure, Maine will continue to make the bottom of these lists,” Steele said of the Kiplinger state tax list.

Also on the list for least “tax-friendly” states are California, Connecticut, Hawaii, Illinois, Minnesota, New Jersey, New York, Rhode Island and Vermont.


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