Old and vicious

Maine has the nation’s fifth-highest tax burden — taxes as percentage of income — partly because its taxes are too high, mostly because its incomes are way too low. Taxes are too high partly because of the great demand for social services because of the low incomes, incomes remain way too low mostly because businesses won’t come to a state where the taxes are so high.

Same old story; same vicious cycle.

April 15 approaches and everybody’s talking taxes: The Tax Foundation issues its annual tax burden report; economists opine; politicians fret, taxpayers cuss. Tax Day gets all the attention. The real problem is pay day.

Maine people simply don’t make enough money. Yes, jobs are being created, unemployment is down, but the new service jobs being added just don’t provide the take-home of the old manufacturing jobs being lost.

To its credit, Maine does seem to be catching on. The support for research and development investment and the growing realization that education, especially secondary and vocational, is a statewide obligation are encouraging signs that more and more Maine voters and lawmakers recognize that economic development takes hard work, not wishful thinking.

Trouble spots remain. Mostly in the Legislature, where long-range planning and commitment continue to do battle with the urge to tinker. Workers and employers agree that the most troublesome aspects of Maine tax policy are income and property taxes. The last legislature started to lean in the right direction by increasing the personal exemption and by initiating the homestead break. The challenge for the current Legislature is to continue to make Maine a more rewarding place to work. Instead, it is leaning back, devoting its attention to the simpler sales and snack taxes — $86 million in tax cuts that won’t make Maine the least bit more appealing as a place to do business.

Maine is not the first state to recognize the need to rebuild its economy. In fact, until last year’s successful R&D bond, it was perilously close to being the last. But one year of modest progress cannot make up for years of neglect. It is true that a previous legislature cannot bind a subsequent legislature. It does not follow that the subsequent has to ignore the progress started by the previous.

And before rank-and-file taxpayers get too cranked up about the tax burden, they would do well to stop pointing the finger exclusively at the State House. One of the most consistent messages of Gov. King’s administration has been the need for local governments — municipal and county — to consolidate services, to look for and to develop efficiencies. Rarely have so many good proposals been so studiously ignored. Die-hard advocates of local control would do well to ask themselves whether salt and sand spreading, pothole filling and emergency dispatching are valid measures of local sovereignty.

Tax Day comes but once a year. Pay day is every week. Maine has started to figure out it takes to have a productive, thriving and self-supporting economy. Maine now must decide whether it will continue to make the necessary sacrifices and investments or whether it will succumb to feel-good gimmicks and the same old vicious same old.