Job creators warn LD 498 and 501 make Maine less competitive and stifle growth
Senator Chipman, Representative Terry, and members of the Committee on Taxation, my name is Ben Lucas and I serve as the Executive Director of the Maine Jobs Council. I am here today to testify in opposition to LD 498 and LD 501.
LD’s 498 and 501 would increase costs on employees, employers, and job creators. Maine’s cost of doing business is already among the highest in the nation and this legislation would put us at an even greater disadvantage relative to other states. A tax increase on our most successful companies would absolutely make it more difficult for those companies to add jobs, expand, invest in the future and their employees, and add value to Maine’s economy.
Maine loses 100% of the tax revenue from businesses that leave our state because it’s no longer competitive to create jobs here. We lose 100% of the tax revenue from businesses from away that choose not to locate in Maine. We lose 100% of the tax growth from investments and expansions that business leaders decide aren’t worth making in Maine.
Increasing the tax burden on employers diverts money away from job creation and future investments. It signals to employers, entrepreneurs and investors – that Maine is unconcerned with burdens on businesses, unwilling to help Maine’s employees and employers compete for work.
High earners in Maine already pay a huge percentage of state taxes. Our last review found that the top 1% of earners pay 40% of state income taxes and almost certainly much higher than average property, excise, and sales taxes. Rather than giving them reasons to leave or discouraging more of them from coming here, we should be attracting them and reducing our need for higher taxes by cutting the cost of government and making it considerably more efficient.
If this legislation passes, Maine will be less competitive with other states and it will be less likely high earners will move or stay here—especially with the expansion of remote work. While some people are moving here, Maine is not the only safe, rural state and individuals looking to relocate here may look elsewhere because of this tax increase. Maine could be a destination state and that is a better way to grow the tax base.
In Conclusion, we encourage this committee to take a far more comprehensive look at how taxes, regulations, infrastructure, workforce challenges, and other issues act as a barrier to job creation in our state.
Thank you.
Ben Lucas
Executive Director
Maine Jobs Council
b.lucas@mainejobscouncil.com
207-441-9333
