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‘States need to pay more attention to their businesses’: Maine fares poorly in tax ranking


A new Tax Foundation study ranks Maine 33rd in its 2020 State Business Tax Climate Index.

“Maine needs to look at its financial goals and make itself more attractive to young families and entrepreneurs,” David Clough, Maine state director at the National Federation of Independent Business, told The Center Square.

To recruit people for well-paying jobs and encourage small businesses to expand, state policymakers need to examine the personal income tax, Clough said, adding that it is difficult to compete on that with neighboring New Hampshire, which has no personal income tax. New Hampshire was ranked sixth in the study.

Clough pointed out that Maine is like much of New England, where most of the states ranked near the middle or in the lower half of the Tax Foundation’s analysis. Massachusetts was ranked 36th, Vermont 44th and Connecticut 47th.

“You see a lot of the New England states group around each other,” he said. “I was intrigued that Maine’s overall rating hasn’t varied very much; in recent years it’s been as high as 37 and as low as 32.”

The results of the study can be useful for state policymakers in seeing how they compare, and where they need to make decisions on taxes to be more competitive, Clough said.

“Every state’s goal is to attract workers and businesses and to get them to stay there,” Clough said. “Every state has to pay more attention to how their tax structure affects their demographic and economic structure.”

The challenge for Maine is competing with other metro areas with a wider array of opportunities.

“Maine has significant challenges. We have an aging population that is slowly impacting the economic performance of the state,” Clough said. “To grow investment and have a better economy, states need to pay more attention to their businesses so they can do as well as they can going into the future.”

“Middle of the pack is not a sign of progress,” he added. “If you have ambition and need to be better, then you have to look for ways to achieve that ambition.”