A hallmark of Governor Paul LePage’s administration has been his advocacy for income and estate tax breaks, policies that favor the wealthy, while championing cuts to health care, public assistance, education and local services, which are most damaging to the poor and middle class.
Now, thanks to a recording of LePage speaking to the Greater Portland chapter of the Informed Women’s Network in Falmouth on Monday, we know that at the root of this philosophy is a complete misunderstanding of how taxes and wealth work in Maine.
“25 years ago Maine had about 2,000 millionaires. Maine has 400 now. New Hampshire at the time had about 500, right now they have 4,000. That’s the difference. That’s when you talk about prosperity and you talk about building an economy those are the things that you need to concern yourself with. So, I am looking at taxation as a big issue,” said LePage.
The idea that we should focus our tax efforts on millionaires is concerning, and you don’t have to be an economist to know the numbers he cites are ludicrously wrong.
First of all, we don’t have solid state-by-state data on the total number of millionaires, and what we do have, the IRS tracking of tax returns over $1 million, only goes back to 1997. Even if LePage somehow has access to everyone’s bank accounts, though, there’s no way these numbers are correct.
In fact, IRS data shows Maine gaining the super wealthy at a faster rate than New Hampshire, despite differences in tax rates and despite New Hampshire’s proximity to Boston. In Maine, there were 307 million-dollar-plus tax returns in 1997 and 562 in 2011, an 83% increase. In New Hampshire, there were 683 in 1997 and 1,124 in 2011, a 64% increase.
Thanks to the Tax Foundation, we can also see exactly what migration has occurred between New Hampshire and Maine from 1993 to 2010. Over that period, Maine has netted 1,361 people who used to file returns in New Hampshire, for a net increase in adjusted gross income of $164,022,000.
People who moved from New Hampshire to Maine were also slightly wealthier than those who moved the across the border in the other direction (with average incomes of $39,413 vs. $36,752).
LePage used these numbers to justify his raising of the estate tax exemption for wealthy families to $2 million and his future plans to exempt estates worth up to $5 million.
I ran the clip by Rep. Adam Goode of Bangor, co-chair of the state’s Taxation Committee, and he was as surprised and concerned as I was about LePage’s false statements.
“It’s one thing to fudge numbers to make your point, it is a whole different league when you use deception to justify tax policies that benefit millionaires while cuts are made to health care, seniors and education for our children,” said Goode.