Letter to the Editor

Attorney General, Janet Mills, is a Democrat candidate for Governor who supports taxpayers by voting yes on question 2 on the November 7th ballot. Question 2 will allow Maine to accept about 486 million dollars of federal funds to expand Medicare. The LePage Republicans oppose accepting those funds to please their rich lobbyist friends who would rather ration health care on the ability to pay. The “economic multiplier effect” principle proves Maine will earn more revenues than the 54 million the State has to pay to procure the federal funds.

The “economic multiplier effect” works like this in a simplified model. If Maine accepts those federal funds and makes that estimated 540 million dollar expanded Medicare expenditure to those hospitals, physicians, and medical employees, they pay income taxes on that money, and sales taxes when they spend it buying products from Maine businesses, and Maine will collect tax revenue. When those Maine businesses earn it, they pay income taxes and then sales taxes when they spend it. Then, when our businesses who earn that revenue the second time that money is spent in the economy spend it, that money is again taxed for a third time. Figuring conservatively, if that money is spent three times in the economy that original 540 million dollar expenditure has increased our economy to about 1.62 billion in extra taxable base.

If that 1.62 billion is taxed with the sales tax (5.5%), it earns 89.1 million in sales tax revenue, or a net gain from the State’s portion of the 54 million original investment of 35.1 million (89.1M -54M).  If that 1.62B is taxed at the lowest 5.8% income tax rate, it earns 93.96M in revenue, or a net gain of 39.96 million from the State’s investment (93.96M -54M). Since Maine has both an income tax and a sales tax, it could produce a net gain of 75 million above our original 54 million dollar investment to procure those federal funds (129M-54M).

Janet Mills isn’t just fighting for healthcare, she’s fighting for taxpayers too!  And when you look at the numbers, taxpayers just can’t trust the LePage Republicans with our hard-earned tax money when they tell us to reject those federal funds. 

Bob Jean