A recent report from President Donald Trump’s administration touting his economic and trade policies and their effect on Maine is playing a major part in his outreach to the state ahead of next Tuesday’s election, but the claims come with large caveats.
The four-page report from the White House Office of Trade and Manufacturing Policy promotes how Mainers are better off under the Trump administration and trade deals that it says will help legacy industries. But it is a political document and uses metrics that some economists question. Economists also wonder about the direct benefit to Maine or whether it is too soon to tell the results of certain actions.
The data also predates the coronavirus pandemic, which has framed the Republican president’s race with former Vice President Joe Biden. The two are waging a close race for the one elector in Maine’s 2nd Congressional District. Trump made a brief visit to a Levant orchard on Sunday and sent Vice President Mike Pence to Hermon for a rally last week. The Democratic nominee’s wife, Jill Biden, will visit Maine for the second time on Tuesday.
For example, the report says critics of income tax cuts enshrined in 2017 by Trump and Republicans “tried to fool the American people into thinking that these were tax cuts for the rich.” While cuts came across the board and led to an estimated $1 billion in benefits to Mainers in 2019, they were larger for higher-income people. A large corporate tax cut was also part of the measure.
Families in the lowest 20 percent income bracket were expected to see taxes as a share of income decrease by 0.5 percent on average in 2019, according to estimates by the Institute for Taxation and Economic Policy. For the top 5 percent of Maine families, taxes were expected to decrease by more than 2.5 percent by that measure.
“The economy started to roar back in the second [term of former President Barack Obama] and continued after Trump was elected,” said Erik Nelson, chairman of the economics department at Bowdoin College in Brunswick. “I suspect that the economic boom would have happened with or without the corporate income tax breaks.”
Maine State Economist Amanda Rector said there are many different reasons why incomes change from year to year, making it very challenging to attribute trends to any particular policy.
“There’s often no proven connection between actions by the president and real impact on Mainers,” James Myall, a policy analyst with the liberal Maine Center for Economic Policy in Augusta, said.
One focus of the report is a claim that real median household income in Maine soared 25 percent, or by $13,230, during the two years after the passage of the Trump tax cuts in 2017 after declining during the Obama administration.
Myall and Rector questioned the source of the income data, saying a more accurate set of information is available. The report used data from one U.S. Census Bureau survey that has a smaller sample size than a different survey from the same agency showing less of an increase in median household income of $58,724 in 2017 and $58,924 in 2019, or just a $200 difference when accounting for inflation, Rector said.
But Peter Navarro, Trump’s trade adviser, said the Census Bureau data used in the report “is a highly reputable survey that allows for analysis of longer trends” and that it uses more detailed income questions of all potential income sources.
Nelson indicated some of the trade tariffs and subsidies highlighted in the survey aren’t what they appear to be. One example he cited was the Trump administration’s September move to open a pool of $527 million in relief funds to fishermen affected by Chinese tariffs. Maine fishermen and lobstermen are eligible for up to $250,000 each under the plan.
The aid was long called for by the lobster industry and Maine’s congressional delegation. But the China tariffs came in retaliation to tariffs the Trump administration put on Chinese goods in 2018, which led to a steep and immediate drop in exports.
“The subsidies for the lobstermen would not have been necessary if the Trump administration did not put tariffs on the Chinese in the first place,” Nelson said. “By giving the lobstermen a subsidy, the Trump administration is admitting that the trade war has hurt lobstermen.”
In another highlight, the Trump administration’s report claimed to have spurred $130 million in investments in 32 so-called opportunity zones in Maine meant to entice developers to invest in poorer areas. It is hard to decouple the relative effect of the zones, since former Gov. Paul LePage picked many projects based on existing investment plans, but the report makes a rosy forecast about them in the years to come.
“The Trump opportunity zones will literally provide great new opportunities to create good, high-paying jobs,” it said.