On the issues
Elizabeth Mitchell, Democrat
Paul LePage, Republican
Kevin Scott, Independent
Eliot Cutler, Independent
Sean Moody, Independent
Do you support the existing Business Equipment Tax Reimbursement program, which reimburses local property taxes paid on most qualified business property?
LePage: Yes.
Mitchell: Yes. I also believe we need to expand the Seed Capital Investment Tax Credit. Right now, businesses large and small in Maine would expand if they could just get an investor to take a chance on them. If we expanded the credit, both in-state and out-of-state investors would start looking at Maine as a place to send their capital.
Cutler: BETR and the newer Business Equipment Tax Exemption (BETE) programs both have the laudable goal of encouraging capital investment. But both are expensive, complicated programs that have many different exclusions. The biggest barrier to investment in Maine is our high cost structure — health care, electricity and providing government services. Those costs, combined with a less-than-friendly attitude on the part of state government, excessive regulation and a regulatory and permitting process that is often unpredictable and unreliable all combine to create “a wall of no” when it comes to creating jobs in our state. ... We must also look at all tax exemptions and incentives to see if they are really working.
Moody: Yes. I favor no taxation of personal business equipment.
Scott: Yes. The BETR program was established as a way to eliminate a tax on investment, and we should tax profits, not investment. The problem with the program is that the property tax is a local tax. The state is simply reimbursing qualifying businesses for taxes they pay locally. What we really need to do is lower the cost of property taxes for both individuals and businesses.
Did you support the tax reform package passed by the Legislature, but defeated at the polls?
LePage: Last June, I joined the 60% of voters who rejected the Legislature’s vision for tax reform. Expanding the sales tax to include such items as car repairs, dry cleaning and computer hardware repair was a bad idea. As governor, I would reject any similar “tax reform” initiative. Reducing the overall tax burden for all Maine citizens and small businesses is my vision for tax reform. We must control state spending to guarantee lower taxes, while ensuring our highest priorities and programs for our most vulnerable neighbors are supported. Smaller, smarter government is the key to new jobs and financial security for Maine families.
Mitchell: I voted for and supported the tax reform package. Maine’s income tax is too high and I believe that it is important to bring it down to help small businesses compete.
Cutler: I reluctantly voted to sustain the tax reform proposal for one simple reason: It is better to tax consumption than income and savings, and for the first time, this was an opportunity to support that direction in tax policy. That said, I wasn’t surprised or particularly disappointed that the tax reform package was defeated. The law was repealed because it lacked fairness, credibility and transparency. I am glad that we now have the opportunity to make a fresh start at tax reform. I will be directly involved in developing and promoting comprehensive tax reform. However, we can’t tackle tax reform until we have persuaded Maine citizens that we have squeezed down our spending.
Moody: My plan calls for a reduction in the size and cost of state government. Tax reform emanating from Augusta represents an attempt at continuing to fund inefficient, overreaching government spending. My proposal for a voluntary 32-hour work week, combined with a pilot program of “results-oriented work” practices, such as is utilized by Google Inc., directly address this problem. By managing the issues concerning the size and cost of government, we can then target tax reform that benefits Maine families and businesses.
Scott: I am one of the few candidates who supported repeal of the tax reform plan last June. I did so because it was complex, confusing and played favorites. It would have taken tax dollars out of the pockets of people who can least afford it. We need to move toward a real flat tax to simplify our tax code, eliminate loopholes and make it more fair and equitable for Maine people. The best way to reduce our tax burden is to create jobs and raise people’s incomes, which we’ll do by strengthening small businesses ... and streamlining regulations. We can provide tax incentives for small businesses by conforming the state’s tax code to the federal tax code to allow full depreciation of businesses losses to be carried forward.
Do you favor the Informed Growth Act, which requires a big-box developer to pay for a regional economic impact study?
LePage: No.
Mitchell: I voted for the Informed Growth Act because it gives communities the tools necessary to evaluate the impacts of large-scale retailers on their small businesses and economic development.
Cutler: I understand and support the goal of the IGA to more fully determine the impact of large-scale developments, especially any adverse impacts they may have on Maine’s communities. At the same time, I am concerned about adding higher costs and greater uncertainty to projects that represent responsible investment in our state and greater opportunities for Maine workers. The IGA has my qualified support, but I also believe it is the kind of new, untested law that needs to be monitored carefully to ensure that it is accomplishing what it was intended to do, and is not simply throwing up another barrier to investment or adding unnecessary time and complication to the permitting process.
Moody: I am not in favor of targeting one business sector over another in paying for economic impact studies. Maine needs to mobilize our existing talent — our state employees — in the task of regional cost assessments. This will not be done with new state employees, but rather with existing manpower.
Scott: I’m undecided. Certainly, any big development coming into a community should examine and be upfront about all of the impacts, and state agencies such as the DEP have oversight in these areas as well. But too often these “impact studies” are just another way to delay or suspend economic development projects. We need the regulatory process to become more of a vertical coordination, instead of the traditional linear approach, with agencies working independently rather than collaboratively.
Would you push for federal reform of the estate tax, which is currently suspended?
LePage: I am focused on state issues at this time.
Mitchell: I would not push for federal reform of the estate tax. However, last year I voted to reduce Maine’s estate tax by more than 20% as part of the tax reform package.
Cutler: If nothing is done at the federal level, estates of more than $1 million will be taxed next year at 55%. This will have a devastating impact on Maine family farms and the many family-owned businesses that contribute so much to the well-being of our state and its economy. I would support higher exemption limits on the value of estates, as well as conformity between state and federal estate tax rates. Maine’s current limit of $1 million, along with our high income tax rate, is driving many successful Mainers to states like Florida, which have neither an income tax nor an estate tax. These are people that we need here in Maine.
Moody: Yes. The estate tax is denying Maine families of much-needed capital for reinvestment in their families and businesses. The story of a man in Rockland comes to mind. He told me of the tax incurred when his father, a man who built his private, successful business, passed away and transferred his company and its wealth down to his son. The tax on his fathers’ estate was equivalent to the cost of a new piece of equipment used in the company’s regular order of business. Taking investment capital away from business is not acceptable, especially in our current economic climate.
Scott: Yes. There is a lot of misinformation about the estate tax, both at the state and federal levels. In 2009, the federal estate tax only affected estates valued at over $3.5 million for individuals and $7 million for couples, and an estate that is passed on to your spouse is exempt from taxation. There are other exemptions available as well. For example, we need to make sure that the estate tax doesn’t prevent farms or family businesses from being sold just to pay the taxes. That’s wrong.
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