This is a quick post based on a Huffington Post report.
The governor’s plan, which would hit groups ranging from nature preserves and summer camps to charity hospitals and private colleges, is drawing the attention of other cash-strapped states and cities where the idea of taxing nonprofits is no longer off limits.emphasis addedLePage wants to lower the income tax from 7.95 percent to 5.75 percent and increase the sales tax from 5 percent to 6.5 percent while extending it to new goods and services. The state would no longer share about $60 million in revenue with local governments, but it would make up for at least some of that lost revenue by requiring cities and towns to levy property taxes on 50 percent of the value of nonprofit-owned real estate valued at more than $500,000.
According to Maine Department of Revenue records from 2013, about $5.6 billion worth of property is tax exempt in the state. Of that, about $1 billion is owned by churches and parsonages, which would not be taxed under LePage’s plan. That leaves $4.6 billion worth of property that would be taxable.
And how exactly would this work out in Maine's finances? According to the Wall Street Journal,
Mr. LePage, who just began his second term, would lower top individual and corporate income taxes, broaden the number of goods and services covered by the sales tax and offer tax credits for low-income residents. He said his plan would make Maine more competitive and attract more young families to the nation’s grayest stateemphasis addedThe plan also eliminates state funding—now about $62 million a year—to municipalities in fiscal 2017. Mr. LePage, in an effort to get local governments to shrink, wants small towns and cities across Maine to find economies of scale by sharing more municipal services.
In return, municipalities would be required to tax large nonprofits at 50% of assessed value over $500,000. Municipalities would also be given authority to collect telecommunications taxes that are now paid to the state.
The logic underneath all this seems to be based on several premises, to wit: A) anything non-profit by intent is an affront to the sacred market forces that rule the economy, B) the best way to address poverty is to make it so miserable that people will abandon it as a life style choice, C) churches good, education, secular organizations bad, D) the rich need more money, and E) giving tax credits to people not making enough to pay taxes in the first place is as good or better than actually giving them free stuff.
Oh, and politics of resentment, too.
Apparently LePage is trying to leapfrog Wisconsin Governor Scott Walker in the Race to the Bottom among states now being looted by Republican governments.
These truly are the Mole People. Both LePage and Walker have had to face the voters to continue to hold office. At some point, as Charles P. Pierce has observed, you begin to lose patience not just with the idiots who voted for them, but for the bigger idiots who didn't show up to vote at all. But hey - at least the GOP has a 50 state strategy, and it's working... for them.