The governor of Maine’s letter accompanying the $850 “relief checks” sent to taxpayers contains interesting statements:
“This money comes from the record surplus that State government recorded this year. My Administration and Democrats, Republicans, and Independents in the Legislature agreed that, in the face of [the rising costs of everyday goods] it would be best to send most of that surplus back to you—the people of Maine—and to do in a way that allows you to use it as you wish.”
Mind you, the argument would have been equally valid even if the cost of everyday goods had been decreasing. Many economic-like statements in the letter are confused or debatable. Moreover, the beneficiaries only include taxpayers who earned an adjusted gross income of less than $150,000 in 2021, which is discriminatory toward the other taxpayers who may have most contributed to the budget surplus.
Among questionable statements in the governor’s letter, I note the following:
You—the people of Maine—are our greatest asset.
Whom does the “our” refer to? If it is “the people of Maine,” the clause is a useless truism: the people of Maine are the people of Maine’s greatest asset. At worst, the clause is a collectivist statement reminiscent of the slogan repeated by Lenina in Aldous Huxley’s Brave New Word: “everyone belongs to everyone else.” A third possibility is that “our” refers to the government of Maine, which would mean that the people are deemed an asset belonging to the government. A charitable interpretation is that Governor Janet T. Mills is simply confused by what F.A. Hayek called our poisoned collectivist language (see his 1988 book The Fatal Conceit).
READER COMMENTS
vince
Jun 30 2022 at 12:31pm
“… it would be best to send most of that surplus back to you—the people of Maine—and to do in a way that allows you to use it as you wish.”
Apparently, Maine defines the people of Maine as only those who made less than $150,000 in 2021.
That would also include the independently wealthy who didn’t work yet survived on $149,000 of dividends income.
Incidentally, the federal tax on that dividend income would be less than 10%.
Monte
Jun 30 2022 at 10:57pm
That which we would call vote-buying by any other name would smell as sweet. But the more insidious move on the governor’s part?
https://www.forbes.com/sites/patrickgleason/2021/06/17/amid-high-inflation-maine-lawmakers-set-to-enact-first-in-nation-program-that-will-drive-up-the-cost-of-necessities/?sh=5ce05b686cdd
Monte
Jun 30 2022 at 10:58pm
https://www.forbes.com/sites/patrickgleason/2021/06/17/amid-high-inflation-maine-lawmakers-set-to-enact-first-in-nation-program-that-will-drive-up-the-cost-of-necessities/?sh=5ce05b686cdd
Pierre Lemieux
Jul 1 2022 at 10:32am
Monte: Thanks for this interesting link. This measure is indeed the equivalent of a tax and probably a regressive one. I say “probably” because the tax incidence is not easy to assess. An indirect tax such as this one (on production or on consumption) will be shared by producers and consumers in a proportion that depends on the elasticities of demand and supply, whatever group it is nominally imposed on. One can see this by imagining that the tax is imposed on consumers (as a sales tax) instead of on producers.
Jose Pablo
Jul 1 2022 at 8:27pm
“This money comes from the record surplus that State government recorded this year”
How can money “come” from a “record surplus”? this is akin to say, “this money comes from my saving account”, which does not explain its origins at all.
What is the origin of the money coming from the “record surplus recorded”?
At the end of the day this surplus is coming from some taxpayers’ pockets (the taxpayers that have received in “free” services less that they paid in taxes).
So basically, some taxpayers are sending (they are forced to) some of their money to other taxpayers (once you get rid of the irrelevant fact that they are using the state as an intermediary to do so).
Is the governor of Maine trying to get the credit for something other people did? Even the taxpayers that did create this surplus have no “merit” at all (at least from a moral standpoint) since they were forced to do it.
Even worse, if sending $850 is the best that “they” can do with this money, why sending more money back to taxpayers is not the best think they can do with the rest of the state budget?
Jose Pablo
Jul 2 2022 at 9:00am
Let’s imagine that the average beneficiary of this relief check spends $60,000 on products and services in the state of Maine. That means that $3,300 of his/her money will go to the state coffers via state sale tax (food and prescription drugs are exempt but let’s forget this distortion for a moment).
So, what the governor is doing is giving back to you around 25% of the money “they” have forcefully taken from you and pretending, somehow, that “they” are doing you a favor because you are a “great asset”.
This is (very much) akin to a robber taking $3,300 from you by force and giving you back $850 as a token of appreciation for your services.
Pierre Lemieux
Jul 3 2022 at 1:02pm
Being literally a great asset is no fun, as slaves of time past would have said.
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