Downeast Coastal Press
Letter January 25, 2005

Putting Envy into the Constitution

By Erich Veyhl

A recent example of the Augusta “tax-shifting to avoid tax limits” strategy is Rep. Edward DuGay's (D-Cherryfield) rationalization for amending the Constitution to legalize discrimination against owners of “second homes.” Dugay says he wants a 25 percent higher mill rate because, according to the Ellsworth American (January 13, 2005) “out-of-staters have come in and paid exorbitant amounts of money for second homes, pushing house prices up for everybody.”

This makes no sense, either economically or ethically. DuGay and his cohorts want to use taxes to punish individuals who have done nothing wrong. Desirable coastal property sells for more everywhere in the world. Does anyone believe that nonresidents come to Maine insisting on paying more than they have to? Should the seller be forced to take less? Don't residents buy second or expensive primary residences? How does penalizing owners of “second homes” stop anyone else from paying for an expensive primary residence? What does punishing those who bought their property years or decades ago have to do with current prices?

Fanning resentment and envy against “people from away” and owners of “second homes” to promote unjust tax discrimination has no place in public policy. Disproportionate property taxes are not caused by “people from away.” They are a direct result of the state's policy of arbitrarily tying the tax burden to land values that have nothing to do with the costs and problems of government or anyone's ability or willingness to pay for them. The politicians can't say “thank you” for the excess already being paid in such property taxes for schools and other costs unrelated to their property, they only demand more.

They don't dare try to tax other assets, like bank accounts, this way, knowing it would cause an even worse capital flight from Maine. But property owners can't protect themselves by moving the land so they hold us hostage to our own values, knowing how much the land means to us.

The five proposed constitutional amendments that would allow even more politically motivated manipulation of property taxes -- through arbitrary rebates, exemptions and rate increases intended to shift the tax burden mostly onto a minority -- destroy the concept of objective law and constitutional equal protection.

Two of the amendments, LD295 legalizing discriminatory mill rates and LD296 exempting from taxes the growth in assessed value of some small business, have just been overwhelmingly rejected 108-37 and 84-61, respectively. The other three, which all permit tax-shifting exemptions and rebates, have passed the House and moved to the Senate, remaining a threat. Thanks to Rep. Howard McFadden(R-Dennysville) for opposing all of them. Harold Ian Emery (R-Cutler), who was ill, was unable to vote.

Meanwhile, politicians frantically try to avoid a real limit on taxes and spending that would be better and fairer for everyone. But they don't want limits on taxes and spending; they want to remain in control of all the money, manipulating the tax system to decide who will be penalized and who will be placated.

Copyright © 2005 Erich Veyhl, All Rights Reserved