Why are taxes so high in Maine? (Bangor, Augusta: sales, real estate)
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There are many many comments on this list about high taxes in Maine. People ask (whine) about high real estate taxes, high auto excise taxes, high this and high that taxes. Strange that no one who lives here has so far made any comment about WHY the taxes are so high.
Surprise, surprise! There are VERY clear and well defined reasons why taxes are so high in Maine. Here is the main reason taxes are so high here: THE PEOPLE HERE LIKE THEM THAT WAY!
Oh well, not directly. But the people in this state have insisted for several generations that State government do more and more for them. And the state legislature, itself an outsized and enormously expensive organization, has obliged with more and more unfunded mandates for the schools that must be paid for by the local towns. Thus most of the towns in Maine are less town and mostly school districts. On one of these threads someone wrote about an elderly couple who's property taxes are now around $6,000 per year and the old house that they bought years ago is now too old for them to manage. Yes, that is the case a lot here. But you must understand that property taxes are based on the assessed valuation of the property which by Maine law must fall within 75% of the retail value of the property. Those elderly people have a property worth around $700,000 assuming a 12mil tax rate!
We in Maine have had a state wide policy for years that within 24 hours of any snow fall, we will have clear roads. The result is that state roads are maintained by an enormous Department of Transportation....enormous for a state with the size and population of Maine. But we have GREAT winter road maintenance. That costs some money.
We have a huge state university system with cam*****s in about every corner of the state. Orono, Gorham, Augusta, Presque Isle, Machias, Ft Kent, and so on. Costs money to have this.
Oh, but of course, we can't have any nasty polluting industry here. Oh, no. Can't have any non-residential forms of property tax revenue in Maine, so it is the homeowner who bears the brunt of local and state taxes.
Now our governor has proposed a major change in the educational system here that would reduce the number of school districts drastically, and eliminate a huge number of administrative positions which according to the governor, will result in a substantial reduction of educational costs throughout the state. And of course, the education establishment is against it, and some people are moaning about the loss of "local control". OK. Well and good. What that means is that the cost of economical operation is ok so long as no one has to pay anything to obtain it.
We can have more employment in the state. We can have more "good paying jobs with benefits" in the state of Maine. But in order to do that we are going to have to be willing to develop the state in such a way that it can be attractive to business tolocate here. So far for generations, it has become more and more the trend to think that we can keep the state pristine and without any sort of industry, and the tourists will flock here in such numbers that there will be lots and lots of money for everything.
Well, no. It simply doesn't work that way, and last summer with gasoline prices poking up close to $3 or more per gallon demonstrated how vulnerable the state is to the vagaries of tourism.
We can change the way things are in Maine, but in order to do that, people have got to start to understand that for every freebe goody handed down by the political bureaucracy, they will have to pay some fee someplace else. Want a local school department with all the teachers, books, pencils, buildings busses superintendants and the lot in your own town? Well, it will mean that your property taxes will be in the thousands. Of course you won't have a fire department, or police department. But golly gee, you will have a nice new school....and if it comes down that in ten years, there are fewer people in town having young children, the school will still be there serving fewer and fewer, but the taxes? Well, they won't go down one bit.
So, the problem with taxes is that we want more and more, and also want to whine about the way it costs to much to have them.
Another thing, while Mainers insist that they have the highest taxes; I did some research on the topic. I came here and it did not make any sense to me.
Maine has four income tax brackets; excluding states that have no income tax, the lowest bracket is not the highest nation wide, nor the lowest, it is about middle. The highest tax bracket is also about middle of the other state income tax brackets as compared to other states nation wide.
So maybe the big deal is all about property taxes? So I researched mil rates and once again I found that Maine enjoys among the lowest mil rates in the nation.
So maybe the big deal is about gasoline taxes? So I searched online and tracked the prices of gasoline in across the nation, I found that Maine's gasoline is often cheaper then neighboring states.
Then someone told me that it is all about vehicle 'excise' tax as no other state has an excise tax. So I researched excise taxes, and I found that sure enough Maine is rare in having an excise tax on vehicles. However every other state taxes vehicles via annual vehicle registration. They use a 'road tax' and lump it in with the annual registration fee. Maine is unique in that Maine calls their annual tax on vehicles: "Excise tax". And apparently it is slewed more toward newer automobiles rather than old. If you drive cars that are over 5 years old, than Maine's Excise tax is in fact much lower than most other state's road tax.
So then I was told about "tax burdens".
Even though each tax individually is lower, and even though all taxes lumped together are lower; the idea is that if you index with by gross-income, than it looks differently.
The average gross income in the state of Maine is lower, so indexed by average income; the same low taxes become to 'look' higher.
If your annual tax 'burden' is $3000 [adding together your income taxes, vehicle taxes, property taxes, and sales taxes] and your gross income is $100k; then that $3k is nothing, no big deal.
If your annual tax 'burden' is $3000 and your gross income is $10k, then it is a big deal.
And so we have Maine.
I went onto my 20-year government pension when I was 42.
I used to live in California, long ago, before I went into the service. If I returned to California, my pension would just barely cover rent [or a mortgage], and I would still need a low paying $60k job to afford food, gas, electricity, clothing, and TV.
So I needed to find a depressed economy; where the average local economy is low, for only there would things tend to be cheap enough that my pension would 'look' like a large income.
I know men who have retired in third world countries, where the average Joe survives on $500 a year. Their pensions make them look like wealthy kings. They buy large estates, and have servants.
But I like America. So while living overseas, and considering where to retire at, I found that Maine's economy is dragging. The locals fight any form of growth and they fight industry. They do their best to keep big businesses away, so there are few jobs, and the average income is low.
I was able to afford a large piece of forestland; with no mortgage I paid cash.
I have been able to afford building a house even while renting an apartment. Now my family has moved into that new house, all without a mortgage.
I know that other states are so terribly expensive that I could never afford to live there, without getting a 9 to 5 corporate job and wearing a suit.
Now I get to raise goats and chickens and honey bees. I would not be able to do this living in California.
Having done a significant amount of research and economical comparisons between our town in Texas and, well, just about anywhere we may want to live in Maine, our taxes are higher here on most fronts. Our mil rate is significantly higher, our vehicle registration (annual) is rediculous. I won't even broach the subject of our failing education system.
Just can't wait to find a new place in Maine to call home and get our family settled in, so that we can join you guys in the gripe about taxes and gasoline prices and the unemployment rate, oh my! BTW, our gasoline prices are running neck and neck with you folks. I'm hoping for a little dip before our cross country drive up there in March. I've estimated as much for fuel as I have for food! That's a first for us.
If anyone sees a van full of kids wearing Houston Astros T-shirts mid-March, you'll know we made it!! And no mud-slinging! We're hurting a little after last season.
Having done a significant amount of research and economical comparisons between our town in Texas and, well, just about anywhere we may want to live in Maine, our taxes are higher here on most fronts. Our mil rate is significantly higher, our vehicle registration (annual) is rediculous. I won't even broach the subject of our failing education system.
Just can't wait to find a new place in Maine to call home and get our family settled in, so that we can join you guys in the gripe about taxes and gasoline prices and the unemployment rate, oh my! BTW, our gasoline prices are running neck and neck with you folks. I'm hoping for a little dip before our cross country drive up there in March. I've estimated as much for fuel as I have for food! That's a first for us.
If anyone sees a van full of kids wearing Houston Astros T-shirts mid-March, you'll know we made it!! And no mud-slinging! We're hurting a little after last season.
Hey, safe trip. Make sure you check out the Bangor area, and if you do, take the van full of kids to the Dairy Queen Brazier in Old Town.
1-We in Maine have had a state wide policy for years that within 24 hours of any snow fall, we will have clear roads. The result is that state roads are maintained by an enormous Department of Transportation....enormous for a state with the size and population of Maine. But we have GREAT winter road maintenance. That costs some money.
2-We have a huge state university system with cam*****s in about every corner of the state. Orono, Gorham, Augusta, Presque Isle, Machias, Ft Kent, and so on. Costs money to have this.
3-We can have more employment in the state. We can have more "good paying jobs with benefits" in the state of Maine. But in order to do that we are going to have to be willing to develop the state in such a way that it can be attractive to business tolocate here. So far for generations, it has become more and more the trend to think that we can keep the state pristine and without any sort of industry, and the tourists will flock here in such numbers that there will be lots and lots of money for everything.
4-We can change the way things are in Maine, but in order to do that, people have got to start to understand that for every freebe goody handed down by the political bureaucracy, they will have to pay some fee someplace else.
1-I think that this is a good idea. Yes it costs extra tax payers money to operate snow removal equipment but somebody has to do it. Either it is done by the DOT or private contractors. I would bet that private contractors would actually cost more money (in which taxes would still pay for) and I would put my money on the DOT for actually getting the job done.
2-Every state has a state university system. Why should Maine be any different? Yes, the state funds these schools, but only partially. They also receive funding from a variety of other sources including alumni and research grants. These are good schools and are far more affordable then any private college. Personally I would rather live in a state that offered it's residents access to quality education at a decent price. You talk about getting more employment into the state, well a good college system is what will attract that (well one thing, anyways).
3-Most of these jobs will require a college education. Since you suggest making the state attractive to outside business, then maybe you would also like to have the college grad employees shipped in as well. Personally I see nothing wrong with keeping the state pristine. It is getting very close to being one of the last non-polluted areas of the country.
4-This will always be true no matter who is in office.
[If your Federal AGI is zero or a negative number like mine, then you put zero here. If you had any Maine income that was not filed on your Federal 1040, then you must enter it on your Maine 1040 and add that income to the number from your Federal AGI.]
[If you Federal AGI is zero or negative, then like many retirees that kind of ends your Maine filing, with the exception of completing the form to get back anything that may have been withheld.]
Your Maine Standard Deduction is $8,900 for Married-Joint.
And
Your Maine Exemption [uses your Federal exemption number] and multiplies that with $2,850 [You and your wife make for two exemptions; or $5,700], [If you still have one child at home then $8,550, etc]
Subtract both your Maine Deduction and your Maine exemption from your Maine AGI.
A married-joint Standard Deduction . = $8,900
A two person household exemption . = $5,700
Totals . . . . . . . . . . . . . . . . . . . . = $14,600
If you AGI is $14,600 or less, than you do not pay any Maine income taxes.
If your AGI is greater than $14,600, then subtract that from your AGI and you would be taxed on the remainder.
We do not pay any Maine income taxes. We simply do not have a high enough income to become eligible to begin paying any Maine income taxes.
Among the other military retirees that I have met, some do pay income taxes and some do not.
Those who came here, and began working in a mill, then retired from the mill, and have that pension. With both pensions, they earn enough to qualify to pay a little Maine taxes.
My DW works part-time, I have an income from the Farmer's Market, and we have rental income. With these three sources of income added onto my pension, for us it is close. Anymore pay raises for my DW and we may have to begin to pay income taxes again.
It depends largely on your second career, if you decide that in your retirement that you wish to pursue a second career.
That second career [if you choose to have one] may increase your Gross Income up to the point where you may become eligible to pay income taxes.
We bought land, and we are building a house. We could support ourselves fine without an additional source of income. However, the building project would go much slower without my DW's job. So we decided to willingly subject ourselves to the hazards of possibly paying income taxes, by having a higher income; largely due to our desire to complete building this house a bit faster.
The average gross income in the state of Maine is lower, so indexed by average income; the same low taxes become to 'look' higher.
Well there you go. The taxes are not too high, we are just too poor to afford them! LOL.
I agree, Maine needs a kick in the pants to attract more businesses to the state. I dont care if its tax breaks, free land, etc. I've always thought if there were more jobs, better paying jobs in Maine, the tax problem wouldnt be a big deal.
PS. All those bonds (loans) you just voted "yes" on. Your taxes (that you cant afford) will be going up to pay for them.
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maine taxes
BTW, our gasoline prices are running neck and neck with you folks. I'm hoping for a little dip before our cross country drive up there in March. I've estimated as much for fuel as I have for food! That's a first for us.
And no mud-slinging! We're hurting a little after last season.
