Remember when Gov. Janet Mills told you that she would not, if elected, support increased taxes? Pay close attention to what happens in Augusta in the next couple weeks, because she may very well have to choose whether she meant that promise or not.
Tuesday, the Maine House narrowly voted — 73 in favor to 70 opposed — to give preliminary approval to a bill that would allow a local option sales tax on meals and lodging. It is now looking like a real possibility that the bill will head to the governor’s desk, and she will face a decision whether or not to sign it.
The bill would allow localities to adopt a 1 percent tax, if the voters in the town approve it via referendum.
Long dreamed of by localities as a new revenue source, some were quick to pounce on the vote and celebrate. Portland Mayor Ethan Strimling, for instance, took to Facebook to pop some champagne, declaring that it was time to “tax tourists to provide property tax relief, fix our roads, and improve education.”
Raise your hand if you believe that Strimling, or any Maine town, would use additional revenue to provide property tax relief. Anyone? No? Bueller?
Make no mistake, if Mills signs this bill, she will have broken a major campaign promise. She will have allowed taxes to be raised on what would likely end up being several hundred thousand Maine residents.
You might disagree, saying that it is in fact the local town residents themselves that will decide if your taxes go up. How wonderfully naive of you.
Let’s say that the city of Portland, believing the meaningless doubletalk of its mayor about lower property taxes and better schools paid for by tourists, decides to approve a local option sales tax. What happens next?
Well, for one, all of the people who voted against the new tax will just have to deal with the fact that they have to pay it. And they’ll have to pay it alright. Any time they decide to go out to eat, they’ll pay it.
More importantly, though, people who were never subject to the vote will end up paying too. If you live in a neighboring town and want to go into the city to eat, you’re paying the tax. If you live in The County and come down to southern Maine for work and need to stay in a hotel overnight, you’re paying the tax. Thousands of Mainers will be paying a tax they never voted for.
It will also set up an arms race, of sorts. Local governments, forever convinced they have “cut themselves to the bone” and with an insatiable desire for more money to spend regardless of circumstances, will start using a neighboring town’s institution of a tax as a reason that local voters should approve one for their community too.
And when they try to sell it, they’ll tell local voters about how that tax money will be used to make their town better. What they won’t mention is that the law, if enacted, actually has a kickback to the state of 25 percent of revenue collected, supposedly going to the Maine Rural Development Authority, a state agency. In other words, people would be voting to tax themselves, and wouldn’t even be getting all of the money.
Most importantly, though, we all know that this kind of proposal is nothing more than a foot in the door technique of tax hikers. “Just let us expand taxes to this new area. It will be small, we promise.”
Right. We’ve all heard that before. Any time a government asks for “just a little bit more” power, or “just a little bit more” in taxes, you know it will be followed up by future requests that will compound well into the future.
When Congress passed the Revenue Act of 1913, it instituted the first income tax in the United States after passage of the 16th Amendment. It created a modest 1 percent tax on incomes above $3,000, and 6 percent on incomes above half a million dollars.
Five years later, the top rate was 77 percent. The government had to finance World War I, after all.
Which is, I think, the ultimate point. Governments never have enough. They always want “just a little bit more” to do what they want. But then they want to do more. And more. And more. And they need more.
This is their latest attempt to get it. And if Mills signs a bill that authorizes this new tax, she will have have broken the single most important promise she made to the people of Maine when she was running for office. I hope she has more integrity than that.