MHPC: Report Shows Mainers Flee to States with No Personal Income Tax‏

 

Maine loses $661 million in income to other states

 

PORTLAND - The Maine Heritage Policy Center has released a study that shows over 11,000 Mainers have fled to states with no income tax, and they took hundreds of millions of dollars with them.

 

The people who chose to leave Maine from 1995 to 2009 took over $661 million in income to other states. The loss of that income has caused Maine state and local governments to lose at least $87 million in income taxes, sales taxes and property taxes.

 

The actual losses in income and taxes is much higher because its does not account for the compounding and multiplying effects of income over time. Every dollar that is spent often becomes $3 or $4 in total economic activity.

 

The report, “Maine Loses People and Their Income to States with No Personal Income Tax,” by Scott Moody, chief economist for MHPC, shows the desire of residents to migrate from Maine, which has the nation’s sixth-highest tax burden, to states with no income taxes.

 

"Opponents of eliminating Maine’s personal income tax will, quite predictably, lament the loss of state tax revenue," said Moody. "However, the analysis clearly shows that the revenue loss is significantly lower than commonly assumed. The economic benefits of stemming, or even reversing, the out-flow of people and their income to states with no personal income tax would be a major boon to our economy." 

 

“These residents are voting with their feet, and they are taking over $44 million a year with them,” said Lance Dutson, CEO of The Maine Heritage Policy Center. “The evidence strongly suggests that eliminating the personal income tax would help level the playing field and give Maine a fighting chance to convince residents to stay put. Retaining these residents and their income would also help Maine’s small businesses and would create new jobs.”

 

Download full report here (PDF)