The Alliance’s modus operandi is to identify a big socio-economic problem, then gather enough signatures to place a citizen’s initiative proposal on the ballot to solve the problem — typically via a program funded through an income tax surcharge on the state’s highest earners.
The latest example is ballot Question 1, coming up for a vote on November 6, a citizen’s initiative proposal “to provide home-based assistance to people with disabilities and senior citizens, regardless of income, funded by a new 3.8% tax on individuals and families with Maine wage and adjusted gross income above the amount subject to Social Security taxes, which is $128,400 in 2018.” (The measure would also tax unearned or investment income at the same rate).
I don’t question that affordable home-based assistance for the elderly and disabled represents a major unmet need in Maine. Maine’s high proportion of elderly residents (the state’s median age of 44.6 years is top in the nation), coupled with the aging of its baby-boomers, is creating an ever-increased demand for home care. At the same time, a scarcity of such services and the state’s rural character makes delivery of them especially challenging.
The Maine DHHS website lists 55 licensed agencies that provide in-home and community support services. If there’s one accessible to you and you can either afford it or are poor enough to qualify for MaineCare coverage, you may be able stay in your house and avoid moving to an assisted living or nursing home facility. Otherwise, you’ll probably have to rely upon the devotion of a spouse, child or other relative for assistance. I’ve seen first-hand the heavy financial, emotional and physical toll this kind of care takes on family members who are left on their own to look after loved ones too old, ill or disabled to look after themselves.
Resorting to a Robin Hood strategy to solve the problem, however, is both unfair and ultimately self-defeating. Robin Hood, the legendary medieval forest outlaw of English folklore, was said to have robbed the rich and given to the poor. Like the allure of the Robin Hood legend, any proposal to force the rich to “pay their fair share” for a worthy cause has an undeniable appeal to the voting public, particularly those voters who aren’t being asked to pay a penny to support the worthy cause. But what it really amounts to is “highway robbery,” a hanging offense in Robin Hood’s day.
I’m not going to get into the legislative nitty-gritty of Question 1. It presents a briar-patch of thorny legal issues, including whether it’s constitutional to funnel taxpayer funds to a Universal Home Care Trust Fund Board (a body answerable to neither the governor or Legislature), whether that board can be compelled to provide confidential information about recipients of home care services to “constituency associations,” and whether home care workers can be treated for collective bargaining purposes as state employees under the Maine Labor Relations Act.
My focus, instead, is on the wrongheadedness of surcharging a small group of taxpayers to fund a program that serves a much wider group.
A group backing the initiative has sent out a mailer unabashedly trumpeting how the measure will help 27,000 people by levying a tax that only burdens 2.7% of all Mainers.
Everyone knows the old saying, “Money talks.” But money doesn’t just talk. It also walks. It’s mobile, and it tends to go where economic opportunity is the greatest and taxes the lowest. The professionals, business executives, entrepreneurs and affluent retirees who earn over $128,400 don’t have to stay in a high tax environment. They can take their portable skills, businesses and money elsewhere.
They won’t have to go that far either. New Hampshire, which has no state income tax on earned income, is right around the corner. Florida, which boasts warmer winters, imposes no state income tax at all, and a Maine resident who wishes to avail himself of the benefit of Florida’s tax laws can do so simply by declaring himself a Florida domiciliary and living there for just over six months each year.
The proposed 3.8% surcharge will give Maine the second highest marginal tax rate in the country, nearly 11% — second only to California, whose top rate of 13.3% doesn’t kick in until a married couple’s taxable income reaches $1,075,000. There’s a substantial risk, therefore, that hiking Maine’s top marginal rate will drive away many of the state’s high income earners, including younger people in the midst of their careers, thus eroding the tax base and contributing to the graying of the state’s population.
Then there’s the question of fairness. This surcharge isn’t a user fee, like a hunting or fishing license, where you pay for what you use. Nor is it a form of social insurance, such as Social Security or Medicare, in which all wage earners kick into a fund that many may never draw upon but which will be available for them if they reach statutory retirement age or become disabled before then. It isn’t even really a progressive income tax, which gradually steps up tax rates as incomes rise, but which is designed to produce general tax revenues rather than funds earmarked for a specific program.
The home care initiative is none of these things. It’s simply a cynical gambit to persuade a majority of voters to approve a measure by offering them something for nothing at the expense of a small group of relatively affluent voters who will be forced to foot the entire bill.
Doubtless the folks at Maine People’s Alliance rationalize this scheme by triggering the 3.8% state surcharge at the point where federal Social Security payroll tax cuts out, namely at earned income levels above $128,400. This Social Security tax cut-off for higher earners has been a sore point with critics of the system for a long time. Hence the Alliance is trying to kill two birds with one stone.
If fairness means anything, however, every taxpayer should be contributing to an expensive social program that benefits society as a whole. In other words, if home care is really a high priority for the voters of Maine, then it should be funded through a broad-based tax, not by highway robbery.
Elliott Epstein is a trial lawyer with Andrucki & King in Lewiston. His Rearview Mirror column, which has appeared in the Sun Journal for 10 years, analyzes current events in an historical context. He is also the author of “Lucifer’s Child,” a book about the notorious 1984 child murder of Angela Palmer. He may be contacted at epsteinel@yahoo.com
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