November 2006 Archives

A new report by the Goldwater Institute in Arizona provides some useful guidance to defeating poverty in Maine. The report states that "Using data from the U.S. Census Bureau, the pages that follow demonstrates that low-tax and -spending states enjoyed sizable decreaes in poverty rates during the 1990s. High-tax and -spending states, meanwhile, suffered increases in poverty rates. This study grades each state with regards to reducing both general and childhood poverty rates during the 1990s."

So how did Maine fare in the 1990s? In terms of general poverty, Maine scored an F+ in the report with general poverty increasing by 0.9 percent between 1990 and 2000 (38th highest). In terms of childhood poverty, Maine scored a D with only a small reduction of 2.2 percent between 1990 and 2000 (40th highest).

The report concludes with this policy prescription: "Private-sector job growth is the most effective antipoverty program. Citizens and policymakers who seek to reduce poverty and improve the lot of the poor should embrace policies promoting as much private-sector growth as possible."

Do taxes affect population migration patterns? The data provided by Atlas World Group seems to indicate that there is a positive correlation between taxes and where people move to.

Atlas World Group annually publishes Atlas Migration Patterns, a measure of interstate and cross-border shipments of household goods in order to track shifts in population bases. The migration patterns are based on 104, 984 interstate household goods moves from January 1, 2005 through December 31, 2005.

Included in the inbound column are Alaska, New Mexico, Colorado, Idaho, Montana, Texas, Oregon, North Dakota, Tennessee, North Carolina, New Hampshire, and Vermont. Of these 12 inbound states; eight out of 12 states are in the lowest 25 states in terms of taxes as a percentage of income.

The outbound distinction went to Minnesota, Michigan, Indiana, Ohio, New York, Maine, Massachusetts, New Jersey, Louisiana, and Mississippi. Of these 10 outbound states; seven out of 10 states are in the highest 25 states in terms of taxes as a percentage of income.

Click here to see the state rankings.

One feature lacking in the public policy discussion in Maine are comparisons made with Canada. This is surprising given that Maine shares a longer border with Canada than with the rest of the United States. As such, Maine competes not only with the rest of New England but also with Canada's eastern provinces such as Quebec, New Brunswick, Nova Scotia, Prince Edward island and Newfoundland and Labrador. While statistical comparisons can be tricky--though it has gotten better with the new North American Industrial Classification System put in place by the North American Free Trade Agreement--it is MHPC's goal to bring Canada into our comparative studies whenever possible.

Fortunately, there are studies that already do such U.S./Canadian comparisons. One important study is the "2006 Economic Freedom of North America" report published by The Fraser Institute in Vancouver Canada. The study finds that the "The statical results of this year's study persuasively confirm those published by the previous three editions: economic freedom is a powerful driver of growth and prosperity. Those provinces and states that have low levels of economic freedom continue to leave their citizens poorer than they need or should be."

The Meals and Lodging Tax

Recently the Brookings Institution released a report calling for a 3 percentage point increase in the "Lodging Tax" portion of the "Meals and Lodging Tax." Never heard of this tax? Please check out our next installment of the "Hidden Tax/Fee of the Week" now available on the MHPC website for more information.

Total Hidden Taxes/Fees to Date: 263

Craig Benson: Maine threatens to steal the New Hampshire Advantage

By CRAIG BENSON
Another View

THE OLD SAYING goes, "there are only two certainties in life: death and taxes."

Government is the only entity that can take as much of your money as it wants and spend it any way it wants. With that awesome power should come responsibilities. First among them is the duty to spend the people's money at a slower pace than our income grows. Otherwise, each year the taxpayers would have less and less real income.

Our quality of life declines as taxes increase. The reality is that taxes really do grow faster than paychecks, meaning quality of life is declining.

The problem has gotten so bad in Maine that voters are poised to weigh in on this issue and threaten New Hampshire's traditional economic advantage.

LINK