At a glance:
- While lawmakers cut or underfund services like family planning, free community college, care worker wages, and eviction prevention, they approved millions in new and expanded tax breaks for wealthy, profitable businesses
- These tax credits are narrowly targeted, often benefiting just one or two large companies or wealthy investors — sometimes for projects that would have happened anyway — while Maine taxpayers take on the cost and risk
- These programs funnel public dollars into private profits, subsidize investors’ returns and widen the gap between workers and the wealthy
- These giveaways prioritize corporate interests over everyday Mainers, undermining trust in government and leaving vital public services underfunded
Maine lawmakers shouldn’t prioritize cutting taxes for wealthy businesses over providing basic services to Mainers. But last session — on the heels of budget cuts to family planning services, free community college, wage increases for care workers, and eviction prevention — the Maine Legislature yet again approved millions of dollars in new and expanded tax giveaways for businesses. These subsidies will funnel Maine taxpayer dollars primarily to the wealthy and big businesses, further exacerbating inequality in the state.
Big profitable businesses lined up for these tax breaks, with some even acknowledging their projects would move forward anyway, with or without state support. “Why not ask?” one said.
These businesses play on fears that they might leave Maine, just like the mill towns of the past. And Maine responds by opening its wallet — whether the cost is $1 million or $100 million — even if it means choosing between funding programs that provide vital services to Mainers or subsidizing expansion of a big profitable business that would have happened anyway.
These expensive, poorly targeted proposals come at a time when Mainers are already struggling and the federal government has given massive tax breaks to the wealthy and large corporations paid for by cuts to the federal social safety net.1
There is a huge amount of power behind giving this money away. This is taking money from the pockets of Maine people, giving it to a wealthy few who have powerful lobbyists. This kind of deal is exactly what breeds cynicism and distrust in government.
— Sen. Mike Tipping
Big giveaways to big businesses
One of the most troubling provisions in the current budget is the expansion of the Food Processing and Manufacturing Facility Expansion tax credit (LD 1951). The new law revives and significantly enlarges a tax credit that expired in 2024, extending it through 2027 and increasing the maximum benefit to $4 million per recipient per year for up to 20 years or as much as $80 million for a single company. Because eligibility requires extremely large capital investment, only a handful of businesses can qualify.
Of the two primary expected beneficiaries, one had already begun construction before the credit was enacted and has publicly stated that the project would move forward regardless of whether the tax credit was awarded. The other completed a $95 million project and, just months after the expanded credit took effect, received approval for a tax benefit totaling more than $30 million. Shortly thereafter, the company announced its sale to a large multinational corporation — a transaction made more lucrative by the newly guaranteed stream of public subsidies.
While Maine potato farmers will benefit from the expansion of these two large potato manufacturing facilities, it comes at a high cost to Maine taxpayers. Agricultural subsidies directly to farmers who are struggling would be a better, more cost-effective use of Maine taxpayer dollars than giveaways to big corporations for actions they already intended to take.
EXAMPLE
Business lobbies the legislature:
>> Tax break is passed benefitting only one or two big businesses (due to narrow qualifying constraints)
>> Business sells to big multinational corporation
>> Business enjoys greater profits from sale at Maine taxpayers’ expense
>> Executives and owners benefit
>> Gap widens between workers and the wealthy
Windfalls for wealthy investors
The legislature extended and expanded two other credits that give away tax dollars to investors in Maine businesses, with Maine taxpayers taking on the risk but seeing none of the financial reward. Both the Maine Seed Capital Tax Credit (LD 125) and the New Markets Capital Investment program (LD 1217) will now give away millions more each year in tax breaks to wealthy investors after changes made in 2025. The Seed Capital Credit doubled total credits from $5 million to $10 million per year, and the expansion of the New Markets Credit will cost state taxpayers up to $97.5 million over the next eight years.
While Maine taxpayers foot part of the cost of these investments, the investors are the ones who get the financial payoff. New Markets is a refundable tax credit, which may result in Maine writing large checks to out-of-state businesses with no Maine tax liability. The Seed Capital Credit gives private investors a 40% tax credit for investing in small businesses. Essentially, wealthy investors see their risks partially subsidized by Maine taxpayers — while Mainers see little to no return.
In its testimony, Maine Revenue Services questioned whether the reinstatement of the New Markets program was necessary due to the recent enactment of another similar program, the Dirigo Business tax credit, saying the programs would likely overlap — meaning businesses and investors would potentially get multiple tax credits for the same investment. In the past large, wealthy employers have taken this credit and then shut down operations.2
EXAMPLE
Investors and businesses lobby the legislature:
>> Tax break is passed benefitting investors and businesses
>> Business makes investment, creates jobs
>> Business enjoys lower taxes/greater profits at Maine taxpayers’ expense
>> Business closes down
>> Local communities suffer in the long term, face large loss of property taxes, job loss
EXAMPLE
Investors and businesses lobby the legislature:
>> Tax break passed
>> Business is successful
>> Investor receives return on investment, while the State does not
>> State writes check to the investor paid for by Maine taxpayers
>> Investor re-invests return
>> Money consolidates among few wealthy investors, wealth inequality worsens
EXAMPLE
Venture capital investor buys up many locations of the same type of business:
>> Business must be upgraded to remain in compliance with industry standards
>> Investor announces it is consolidating, closing, or moving some locations
>> Investor/business secures tax breaks
>> Returns on venture capital investment are greater
>> Wealth inequality gap widens
Note: All examples reflect actual circumstances under which businesses received subsidies in Maine.
Government sanctioned, institutionalized inequality
We should be clear about what this represents: government-sanctioned, institutionalized inequality.
At a time when Maine faces real challenges — from housing shortages to workforce gaps to underfunded public services — lawmakers are choosing to funnel taxpayer dollars into private profits. Mainers deserve a different set of priorities: policies that put people before corporations, invest in public goods, and build an economy that works for everyone, not just those already at the top.
Maine Center for Economic Policy has been sounding the alarm bell on these wasteful programs for years. These are not small tax giveaways. They reflect a deliberate policy choice to prioritize corporate interests over the needs of Maine workers, families, and small businesses.
These costly, poorly targeted tax giveaways primarily benefit already wealthy businesses, not local mom-and-pop shops struggling to get by, or the independent businesses disappearing from Main Streets. By design, they concentrate public resources in the hands of a few while leaving critical public needs unmet.
The continued enactment of tax giveaways like these to big businesses is, as one legislator put it, “everything that’s wrong with politics.” We need lawmakers to push back against corporate lobbyists and fight for Maine people.
Notes:
[1] Myall, James. “How Trump’s Big Beautiful Bill Further Enriches the Rich and Immiserates the Poor.” Maine Center for Economic Policy. July 8, 2025.
[2] Wight, Patty. “Old Town Mill will be closed for extended shutdown.” Maine Public. March 29, 2023.