Policy Brief: Are Tax Giveaways Worth the Money?

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Maine forgoes billions of dollars in revenue each year by giving out tax breaks. These tax giveaways are costly and sometimes poorly targeted to achieve intended outcomes. When Maine dedicates resources to unproven tax breaks, we lose funding that could be better spent to strengthen Maine’s workforce and grow our economy. Maine must raise its standards for what we expect of these programs and how they are administered, what information is available about them, and whether there is any evidence that they work. Legislators should not continue to extend and expand these costly programs without this information.

The legislature has sought to understand the impact of these tax giveaways for decades, most recently establishing a review process through the Office of Program Evaluation and Government Accountability (OPEGA). But data challenges have stymied many of OPEGA’s reviews and limited its ability to draw conclusions about program impacts.

Instead of funneling money into unproven tax giveaways, the state should invest funds in programs including housing, child care, and paid leave that will improve economic opportunities for all Mainers, advance equity, and allow people to fully participate in the workforce.

We must also scrutinize and reform tax giveaway programs or Maine will continue to hemorrhage funds needed to address issues that threaten the economic health of our state. To reform tax giveaways, we must increase transparency, improve business accountability and data reliability, sunset unproven programs, and oppose expansion of new and existing unproven tax breaks.

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