Hello, I am Senator Marianne Moore of Senate District 6.
Last month, the administration announced that, even though Congress had specifically intended that PPP funds would not be taxed on the federal or state level, the plan was to raise more than $100 million by levying a state tax on these loans.
Following loud and widespread opposition to the proposal, a new plan was unveiled that would tax only those organizations that received more than one million dollars in PPP funds.
Immediately, allies framed this proposal as one of fairness. “By definition,” wrote an editorial in the Press Herald, those who would still be taxed “are not the struggling restaurants and motels that are still suffering from COVID-related loss of income.”
In reality, this is exactly who would be taxed.
Among these are fourteen restaurants, including a chain of sandwich shops, pizza parlors, and a brewpub, and hotels. Together, the PPP program saved more than 4,300 of these jobs that pay an average of $16.70 per hour.
These are the very people that have suffered enormously during the closures and other restrictions due to the pandemic.
Contrary to what some might have you believe, this is not a program that benefits rich, corporate elites. No one in Maine is using PPP money to upgrade their corporate jet or buy a new vacation home in the Virgin Islands.
Categorizing the new proposal as only affecting “one percent” of those involved is misleading and unfair, since 253 of Maine’s larger employers affecting 46,000 workers would still be taxed under the new proposal.
As its name makes clear, the PPP program was not created to protect corporations. Its purpose is to protect the paychecks of Maine workers, and it has done just that for more than a 250,000 hardworking Mainers. The 28,000 organizations that received PPP funds include churches, non-profits, schools, and small businesses, the backbone of the state’s economy.
The program has already generated millions in revenue for state government. More than 250,000 workers received this money in their paychecks that were saved represent nearly half of all Maine workers. These employees will pay income tax to the state for that money by April 15, pay sales tax on things they buy with this money, and buy things in their local communities that help keep other businesses solvent and paying state taxes as well.
The stimulus effect of putting billions of dollars in cash into our local economies has saved countless employers, thousands of Maine jobs, and put untold millions of dollars in revenue into state coffers.
Still to be taxed under the revised proposal are nursing home workers, a tire service company, heating oil deliverers, and many more working-class Maine jobs.
Those who received more than $1 million in PPP funds did so because they employ more people than those that received less, and not necessarily because they are especially wealthy or profitable. Taxing them and not others will do nothing to create “fairness” in our tax code.
One in five Maine workers whose paychecks were protected by the PPP fall into this $1 million-plus category. Far more than “one percent.” They are the ones who will suffer if we decide to ignore the intent of the program and its creators, not some imaginary corporate wealth mongers.
Rest assured I will continue to support the intent of Congress and the employers who received PPP funds and keeping them tax free.
Again, I am Marianne Moore of District 6.
Have a wonderful winter weekend in Maine.