Maine taxpayers could receive a nice gift from Washington this holiday season if Congress follows through and passes tax reform. The first major tax code overhaul in three decades is moving forward and could be signed into law by the end of this week.
That’s big news for Maine’s workforce and, in particular, the trucking industry, which drives the economy by moving the goods that furnish our homes, stock our store shelves and build our businesses.
Maine’s trucking industry provided 28,420 jobs in 2015, or one out of 18 in the state. In the same year, total trucking industry wages paid in Maine exceeded $1.2 billion, with an average annual salary of $43,611. The U.S. Bureau of Labor Statistics reported in May 2015 that Maine’s 8,680 heavy and tractor-trailer truck drivers earned an average annual salary of $38,530.
Like many industries across the country, we see tax reform as a major win. The tax code has been a longtime barrier to growth for trucking.
We carry an inordinate tax burden, paying the highest effective rate out of any mode of transportation, including rail. In 2014 alone, the trucking industry in Maine paid approximately $165 million in federal and state roadway taxes. The industry paid 33 percent of all taxes owed by Maine motorists, despite trucks representing only 8 percent of vehicle miles traveled in the state.
We also grapple with federal and state highway-user taxes and excise taxes. This includes the tax on special fuels, the heavy vehicle use tax, the 12 percent excise on new trucks and trailers, as well as the tire tax. As of January 2016, a typical five-axle tractor-semitrailer combination paid $9,101 in state highway user fees and taxes in addition to $8,906 in federal user fees and taxes.
These taxes were over and above the typical taxes paid by businesses in Maine.
Maine has a lot to gain from tax reform. The Tax Foundation estimated that the Senate version of the tax bill could create 4,000 jobs in Maine and give middle-income families a $2,238 gain in after-tax income.
As an industry of small businesses — 97 percent of trucking companies operate with fewer than 20 trucks — trucking knows how reducing tax rates can spark a growing company. More money for our small business means investment in employees and equipment. More take-home money for our employees helps them provide for their families and keeps them happy when they come to work.
It’s no secret that Maine has lost tens of thousands of good-paying foundational jobs, mainly in manufacturing and papermaking. The resulting economic impact has led our remaining businesses to make hard decisions to survive.
But Maine companies don’t want to just survive; we want to be active participants in a vibrant economy, and that can be made possible with tax reform. Maine businesses want to grow our companies, employ more people and reinvest in our communities, which is why we need tax reform that will be a stimulus to do all these things.
Tax reform is no easy task, which is why we haven’t seen a real overhaul in over three decades. We are grateful to Sen. Susan Collins for supporting the Senate’s version of the tax reform bill. As action is taken on a final tax reform package, we hope she and Sen. Angus King will get the final bill across the finish line and make tax reform a reality for the many small businesses and employees in Maine.
Mainers rely on the trucking industry to do its job and make on time deliveries. We hope Congress will do its job and deliver real tax reform.
Barry Pottle is president and CEO of Pottle’s Transportation, a third-generation, family-operated motor carrier based in Bangor. He is also first vice chairman of the American Trucking Associations.
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