On behalf of the more than 1,800 members of the National Taxpayers Union (NTU) in Maine, I write in opposition to LD 1432, legislation that would impose a new tax on milk of up to 12 cents per gallon. It is nothing short of astonishing that with milk prices at record levels, legislators would even consider slapping a higher tax on something as essential as milk. Already the cost of milk for average families is raised dramatically by a myriad of state and federal programs, but soon Maine families could be paying $4 million more for the "privilege" of consuming one of the most basic food items on every family's shopping list.
Almost as ridiculous as the tax increase are some of the arguments being used to justify this money grab. Specifically, backers have claimed that this new source of revenue will be used to help "save" Maine's dairy industry despite the fact that funds received from this new tax will be allocated to the state's general fund. Even more troubling is that higher milk costs will obviously hurt milk sales. Reduced sales mean reduced milk consumption. It is hard to see how taxing milk consumers and allocating those revenues to the general fund will help Maine's dairy farmers.
Milk -- both in Maine and elsewhere -- is one of the most heavily subsidized and regulated products in the nation. The Legislature is only piling on to that messy burden with this tax hike. Instead of new regulations and higher taxes, the Legislature should be doing everything possible to lower taxes on farmers, businesses, and consumers.
Even if Maine could indeed "save" its dairy industry through higher taxes and new subsidies, such policies are not economically sound. Instead, Mainers should be able to purchase the best quality milk from whatever source they prefer at a low cost. Fair tax policies that lower the burden on everyone are the only way to keep Maine's economy -- and its dairy industry -- healthy.Sincerely,
Paul J. Gessing
Director of Government Affairs