I just moved to New Hampshire from California as part of a bet on remote work, and that has paid off nicely. The winter was bad, but at this point neither as miserable nor unpredictable as a
California summer. (We had power the whole winter).
You could write a similar article about New Hampshire, though in a lot of respects , we’re already pretty well set up to be a remote work state by having built southern New Hampshire around being a Massachusetts commuter hub.
I think NH is a good bet. The smart money says when the next recession hits the first to go will be the remote workers. Asking everyone to come back to the office is a good way to reduce staff without the stress and drama of a layoff. In NH you can still get a job in Boston. In Maine that’s not really a viable option.
There are certainly some similarities between the two states, but also some huge differences. Maine is about four times the size of New Hampshire and New Hampshire has more than three times the population density.
As Lance Hunter mentioned, you've got to consider winter.
It is amazing that in a piece that suggests Maine could really attract a lot of year-round residents who work remotely and looks to Florida as inspiration, Matt does not mention "winter" even once -- even though he himself only talks about how his family goes to Maine in the summer.
Yes, there are a lot of small bore good ideas in this piece. And the really challenging big idea of fundamentally changing the way taxes work in Maine. They all seem pretty good.
But if the goal to get more people to move to Maine year-round, you have to factor in people's willingness to deal with Maine's winters. Even though they've gotten milder in more recent years, they ate still New England winters. And, nationally, we do not see states with serious winters attracting tons of people the way we see states without serious winters.
As a born & raised Mainer, my suggestions would be:
Give the state a fund to purchase old timber company land, and grant small lots to homesteaders who build a structure (not a trailer) there. This would mostly be in the rural 2nd District. Is this a huge-scale solution? No, but it would encourage a certain type of person to move to Maine, and any little bit helps on the margin. This could be funded with a bond, where the lifetime value of new residents is greater than the cost of purchasing the land. Maine was revitalized by a wave of hippie homesteaders moving in the 70s (including my parents!)- maybe the next wave could bring a new generation of off-the-grid types.
More radically, the state could find a financial way to keep recent grads- possibly a rent subsidy? Unlike most poor rural states, Maine has excellent colleges (Colby, Bates & Bowdoin), but of course most grads of elite colleges leave immediately upon graduation. A two or three year rent subsidy to live in Maine maybe could help keep them. It could also benefit Bangor (home of UMaine, a huge college) and Lewiston (home of Bates) just as much as Portland, so the 2nd District might be more amenable if they see a direct benefit to their largest cities
On your point about getting college graduates to stay - I've never understood why state colleges subsidize previous residents as opposed to future residents with in state tuition.
My thought would be state school should cost 40k a year so would be ~160-200k. Every year you live in state after you graduate the state would forgive 15k of your debt. So if you stayed there 10 years, 150k would be forgiven. What states really should want is for students going to their state colleges to stay in their state and if you moved out of state, they would benefit from you paying the extra amount.
In principle, the California schools do this (at least for grad school). You have to establish some number of in-state ties (bank account, clubs, driver's license) before they grant you in-state residence. Then your life is so tied up in Californian society that it's a pain to move.
(OTOH, I can't tell if the way it works in practice just ensures you pay California taxes on your income & property.)
I just doubt that Maine really has enough money in the budget to forgive those loans- especially from Colby, Bates & Bowdoin, which charge 'elite school' tuition. A rent subsidy might be more workable
I wonder if there are any legal/constitutional barriers to this. Probably not.
But I think the real problem is that even in Maine, a pretty large number of college graduates already stay in-state after graduation (maybe not Bowdoin grads, but certainly University of Maine grads do). So if you offer 15k/year to everyone who remains in state after graduation, you're not only paying the people you newly induce to stay in-state, but also the much larger group of graduates who would have stayed in state anyway. So it would get pretty expensive.
I mean you could adjust the numbers some, but a quick google search says that instate tuition for U of Maine is 9k, while out of state tuition is 29k. My point is that they should flip that around so that it costs 9k if you stay in state, and 29k if you leave the state.
The key point is that you subsidize people who stay and pay taxes in your state, not those who happen to live in the state before they went to college.
Right, but to make that work you'd have to charge in-state students 29k up front, and that would be... unpopular. And would probably affect enrollment.
Maybe - though at the rate that young students are taking loans, I'm not sure that many think deeply about the costs. For older people, I think it could actually be better if the state agreed to pay off more. It would also incentivize finishing the degree immensely.
Interesting take on the situation, and one that I would like to send to (a very likely non-subscribing) friend of mine who served a few terms - and I think may do so again - in the Maine House of Representatives. He was a proponent of Maine's new ranked-choice voting scheme, and so not afraid of new and weird ideas.
A couple thoughts:
While it's true that "reluctance to officially give up on the idea of a massive revival in the paper industry" is a part of what drives resistance to the idea of an upcountry national park, there is also a strong feeling among many that by making it a *national* park Mainers would be giving up too much to the authority of the federal government.
Likewise, environmental considerations are a part of the opposition to the CMP Corridor. But there is also a strong attitude that since the project will ultimately benefit Quebec and Massachusetts, and really no one else, why should Maine allow the use of its land?
There would also be pushback on the tax policy changes put forth here. Why would those in Maine's First District (the southern, denser, and much more prosperous part of the state) agree to share their relatively higher land valuation tax payments with the rest of the state's communities? Why would those in Maine's Second District (northern, rural, and used to getting beat up pretty bad economically) agree to let sales tax revenue be spent in the areas where its collected rather than going to the state's general fund? Yes, compromise is possible. But it's hard. (Hard boards, maybe?)
They literally just sponsored a developmental PGA Tour tournament called the “Live and Work in Maine Open.” Maine and all of its midsummer beauty was just on TV for every golf fan to see.
Hopefully a lot of people in their 30s and 40s said “Man… the second my parents move to Florida. I’m gonna start thinking about working remotely in Maine.”
>>>...there are plenty of people moving around, and capturing a relatively small share of them could be a complete game-changer for the state.<<<
I'm sure more people WOULD move to Maine if it weren't for the fact that you can't get theyah from heeah.
I personally know a fancy ad executive who's now based in Maine. No need to live in NYC. He just commutes to Manhattan and to his Midwestern client account every so often. And why not? It is beautiful.
I've spent a lot of time "Down East" (in my particular case the Maritime Provinces more so than Maine) and my take on the region's weather is that what's difficult is the chilly spring, and how it seems to extend well into the summer. The winters in that part of the world aren't all that much more severe than, say, metro NYC, if we're talking about the coasts (interior is a different matter). But at least further south in the urban sprawl you know you're going to be rewarded before too long with some warm spring days, and eventually some hot, muggy weather (I never minded the heat/humidity in Boston too much both because it's a lot less severe than some places and also because it doesn't last long, so I tried to appreciate the 10-12 weeks of the year when the weather in southern New England is subtropical).
But Down East you can get damp, chilly rainy days extend into July on occasion. Southerners who come up in mid summer might marvel about how lovely the weather is, but they haven't gone through what the locals have (the latter might be pining for some nice hot days -- not trying to get away from them!).
One of the good things about more remote work is it makes cold weather less bad. Not having to commute in bad weather would make the climate more manageable.
they might get warmer, but they won’t get brighter. best solution is to winter further south and go up there 3-4 months a year. with remote work, more people will be able to do that.
The three highest property tax states are New Jersey, New York, and Connecticut. All three have pretty high income taxes. Florida property taxes are much lower than New Jersey’s and there is no income tax.
It's also important to look at metro area tax rates not state averages. The property taxes in Greenwich CT are 1.1% vs. 3.75% in Austin for example. Ah but prices are lower you might say. The ongoing boom in Austin has narrowed that considerably.
Property tax rates don't increase with demand. San Antonio/Bexar County (where I grew up) has a higher average property tax rate than Austin/Travis County, even though the latter is considered "cooler" than the former. Chicago, relative to other parts of Illinois, has less onerous property tax rates on the whole.
It's also probably easy for a place like Greenwich to keep rates low because the total assessed value, relative to population, is really high (I'm guessing).
How do the assessments of the property values compare? What are the actual raw tax intake numbers per $1,000 of market value? States enjoy playing games with assessments and mill rates.
MY basically views timber workers as an anachronism who should accept that their industry is dying and understand that the focus of politics will be accommodating their betters for the greater glory of the tax base. Isn’t that a little cavalier? It’s about as politically astute as Democratic support for Nafta or the TPP. It creates space for Republicans to lock down the working class vote through hollow appeals to nostalgia.
I thought Matt’s schtick was packaging progressive politics for a broader coalition that includes working stiffs. In that spirit, forestry is a competitive industry and minor cost differences can confer a competitive advantage. Why not use increased tax revenues from new residents to subsidize forestry jobs. Make it transparent, eg a $2 bonus paid directly to forestry workers for every hour they work up to 40 per week. This would let private employers offer lower wages and beat foreign competitors. The proposed national park is so far from the coast it wouldn’t be of much value to most remote workers anyway. Let the inland people maintain their lifestyle and use tax revenues from the coasts to gently subsidize it. Everyone wins.
The Maine paper industry died due to the rise of the Internet and a declining need for paper, among other things. A $2 per hour bonus is not going to have any effect- the jobs are mostly gone, permanently. Your suggestion would be about as effective as other protectionist schemes, which is to say not at all.
The industry also had unusually aggressive/confrontational unions, which simply hastened their early death. Maybe a lesson for unions there
It’s hardly apparent that the forestry industry is in terminal decline. Yes demand for newsprint is down, but most paper products are toilet paper, paper towels, boxes and the like. Demand for building lumber has increased and Maine is well positioned to export to Europe and even Asia. Weyerhaeuser had higher revenues in 2019 than in 2010. It’s not a growth industry, but it’s a big industry that could stay visible with subsidies.
If companies could make toilet paper, paper towels and boxes from Maine lumber right now, they'd probably already be doing it, nah? If not, I don't think that a $2 an hour subsidy is going to be what tips them over the edge
The few paper mills that still manage to make a go of it in Maine make niche, high-value add products. And even then it’s a close thing. There’s a mill in Skowhegan that makes a specialty product: A coated paper intended for food packaging, FDA compliant and 100% recyclable. They are profitable but still had to cut 200 jobs and then petition the city for property tax relief. Their property tax bill was cut by $1.2M annually. In a city with 3,700 households.
With the right payoffs to the right politically connected industries, the laws of physics, agronomy & arithmetic can be suspended Ken. We'll bring back the buggy whip industry while we're at it too- killed by unfair competition from those newfangled 'automobiles'!
That makes Maine timber land less productive. It doesn’t make the workers much less productive as most of the work occurs at fixed stages of tree growth. It just spreads those times out and increases the ratio of land to workers
Have you ever seen a modern tree harvesting machine in action. Amazing. One man and a tankful of diesel can do the work of a hundred 18th Century lumberjacks, and he doesn’t even have to live on site. (It’s much more environmentally sound, too.) The land:worker ratio has been dramatically increased by dramatically cutting workers.
Far less so than someone like, say, JD Vance, who espouses policies that will leave such workers high and dry. Trumpian rhetoric doesn't pay the bills. Strongly robust redistributive policies can enable working families everywhere to enjoy a high quality of life. You're right the politics of this are tricky, though. But that doesn't mean we should eschew advocating for such policies in favor of stuff that's not going to work. (Every high income country has seen de-industrialization — and a concomitant decline in the share of the workforce engaged in related jobs: the US is hardly alone here).
The cultural conflict here is that many knowledge workers want the timber industry to die (or go somewhere else) because they would rather have huge parks than forestry jobs. I’m totally for protecting old growth forests, but Maine has very few of those, it’s been logged for 250 years. There are lots of mature second growth trees than can be harvested and replaced with seedlings. The carbon impact isn’t even that bad.
"It’s about as politically astute as Democratic support for Nafta or the TPP."
This is an apples to oranges comparison. NAFTA doesn't happen without political support. Paper companies are cutting back regardless of political support. In places with dying paper industries, all politicians loudly announce their support of the industry. However, there's not much to be done. In principle, it could be portrayed as political instead of economic (like coal), but this is harder to pull off because, again, all politicians loudly support it. Politicians can say, "Look, I support the industry as much as anyone, but there's only so much we can do, so let's think about plan b."
Slap that bumper sticker on your Connecticut-registered car and take a drive to Maine and see what happens. Bonus points if you leave a Yankees cap visible in the rear window.
I didn't read this article to be about political strategy or how to deal with political constraints. It's just saying "this is good policy." Politicians obviously should only bite off as much as they can chew.
Oh man would that be amazing for takes. The real-time content it would generate for this substack would be can't-miss. Like Hunter S. Thompson running for sheriff or William F. Buckley for mayor, but in the social media era.
Realistically, I think that "a large influx of full-time and part-time remote workers is good for the state and we welcome it" would be a hard attitude for many Mainers (and people of other regions) to adopt.
What this means for them specifically is that "a bunch of people who are probably either younger than me, richer than me, or both, are going to come to my state and use their influence to change it to fit their preferences rather than mine."
Most people don't like change unless they find their personal circumstances intolerable. They especially don't like change in the place they think of as their ancestral homeland because that impairs their connection to their own past.
People who advocate for big social changes need to do a better job of combating nostalgia. Too often, though, they foster and rely upon nostalgia as an argument for why the CURRENT state of affairs is unacceptable. It's a weird kind of progressive conservatism, and it tends to breed NIMBYism.
I'm a Mainer, although I don't live there anymore, and I basically think this is right on all points. Two little quibbles:
1. I wish you had talked more about immigration and refugees, which have been significant in parts of Maine, particularly Lewiston where I'm from but also Portland.
2. One issue with transmission lines specifically is that the scenic mountains extend all the way across the state, so anything coming from Quebec has to go through nice places at some point. This has been an issue in New Hampshire as well.
Just a reminder for remote workers - if you're working remotely in a state with an income tax you need to pay taxes in that state. Even if you're only there for a week. I expect states to crack down on this. You don't want to get a letter in 2 years from state X saying you owe $x,000 plus interest and penalties.
Court decisions pending, you might have to pay taxes in Mass as well as your home state if your company is located there and you work remotely from another state.
You would take a credit on the one state against the other state, no? So functionally you just end up paying the amount of tax owed to whichever state has the higher rate.
Not necessarily. That only happens if your state of residence has a tax reciprocity agreement with the other state, which not all states do. For instance, Pennsylvania and New Jersey have tax reciprocity, so if you work in Philly but live in South Jersey, it works the way you say. However, PA and New York don't have such an agreement, so if you live in Northeast PA and either work in like Binghamton or take the long commute to NYC, you pay full tax to both PA and NY. The same applies if you just decide you like the view in the Poconos or the cheaper rent in Philly and decide to telework your NYC-based job. (There's some other stuff going on about nexus depending on whether you're required or allowed to telework, which is what Otis and BZC were talking about, but this is the baseline.)
(I'm a local tax attorney in Philadelphia, this is sort of my bread and butter. These issues have occupied our local bar association's tax section since last March, but they were big even before then.) (Deleted prior comment because revisions)
I've read quite a bit about NY and NYC specifically trying to recoup people who went remote. I'm just don't understand the legal rationale. If you live in another state and don't spend time in NY, what is their legal standing to tax you? Would you be able to provide a brief overview or pointer to somewhere that does?
The question is "nexus," which is one of the most headache-inducing concepts in tax law. Basically the question "where is the work being done" is surprisingly hard to answer. Seeing as it's 6 pm on a Friday, I'm too tired to fully explain it now, but yeah. "Nexus" is your Google search term.
When I was an employee with significant domestic business travel, our HR and Finance people used send us form memos annually about state tax related to business trips. It seems that most people working with a national or regional client base -- management consultants, lawyers, engineers -- would be need to complete state tax returns for any state that they worked in for more than a day. I expect that compliance rates were quite low. Someone told me that the main targets (apart from interstate commuters) were high earners with public schedules e.g. professional sportspeople and entertainers.
Glad to see the land value tax, one of my pet policy ideas, get some love. There's definitely room in the takes market for more Georgist writers.
I've heard that the tax situation for people living in one state but working for a company located in a different state can be hell. This is really something that needs to be addressed, but I'm not quite sure how.
Multifamily real estate investor here. Wednesday night I did a webinar for our passive investors about how the remote work trend offers great opportunities for flyover country. As part of it I linked to a site that tracks places that will pay you to move there.
From an economic development perspective, it's a much more efficient approach. Instead of focusing on tax incentives to get companies to move, just spend money on people.
I just moved to New Hampshire from California as part of a bet on remote work, and that has paid off nicely. The winter was bad, but at this point neither as miserable nor unpredictable as a
California summer. (We had power the whole winter).
You could write a similar article about New Hampshire, though in a lot of respects , we’re already pretty well set up to be a remote work state by having built southern New Hampshire around being a Massachusetts commuter hub.
I think NH is a good bet. The smart money says when the next recession hits the first to go will be the remote workers. Asking everyone to come back to the office is a good way to reduce staff without the stress and drama of a layoff. In NH you can still get a job in Boston. In Maine that’s not really a viable option.
There are certainly some similarities between the two states, but also some huge differences. Maine is about four times the size of New Hampshire and New Hampshire has more than three times the population density.
Maine is the better beer state.
As Lance Hunter mentioned, you've got to consider winter.
It is amazing that in a piece that suggests Maine could really attract a lot of year-round residents who work remotely and looks to Florida as inspiration, Matt does not mention "winter" even once -- even though he himself only talks about how his family goes to Maine in the summer.
Yes, there are a lot of small bore good ideas in this piece. And the really challenging big idea of fundamentally changing the way taxes work in Maine. They all seem pretty good.
But if the goal to get more people to move to Maine year-round, you have to factor in people's willingness to deal with Maine's winters. Even though they've gotten milder in more recent years, they ate still New England winters. And, nationally, we do not see states with serious winters attracting tons of people the way we see states without serious winters.
John Hodgeman and Matt Yglesias: my personal most exciting crossover event in history.
As a born & raised Mainer, my suggestions would be:
Give the state a fund to purchase old timber company land, and grant small lots to homesteaders who build a structure (not a trailer) there. This would mostly be in the rural 2nd District. Is this a huge-scale solution? No, but it would encourage a certain type of person to move to Maine, and any little bit helps on the margin. This could be funded with a bond, where the lifetime value of new residents is greater than the cost of purchasing the land. Maine was revitalized by a wave of hippie homesteaders moving in the 70s (including my parents!)- maybe the next wave could bring a new generation of off-the-grid types.
More radically, the state could find a financial way to keep recent grads- possibly a rent subsidy? Unlike most poor rural states, Maine has excellent colleges (Colby, Bates & Bowdoin), but of course most grads of elite colleges leave immediately upon graduation. A two or three year rent subsidy to live in Maine maybe could help keep them. It could also benefit Bangor (home of UMaine, a huge college) and Lewiston (home of Bates) just as much as Portland, so the 2nd District might be more amenable if they see a direct benefit to their largest cities
On your point about getting college graduates to stay - I've never understood why state colleges subsidize previous residents as opposed to future residents with in state tuition.
My thought would be state school should cost 40k a year so would be ~160-200k. Every year you live in state after you graduate the state would forgive 15k of your debt. So if you stayed there 10 years, 150k would be forgiven. What states really should want is for students going to their state colleges to stay in their state and if you moved out of state, they would benefit from you paying the extra amount.
In principle, the California schools do this (at least for grad school). You have to establish some number of in-state ties (bank account, clubs, driver's license) before they grant you in-state residence. Then your life is so tied up in Californian society that it's a pain to move.
(OTOH, I can't tell if the way it works in practice just ensures you pay California taxes on your income & property.)
I just doubt that Maine really has enough money in the budget to forgive those loans- especially from Colby, Bates & Bowdoin, which charge 'elite school' tuition. A rent subsidy might be more workable
I wonder if there are any legal/constitutional barriers to this. Probably not.
But I think the real problem is that even in Maine, a pretty large number of college graduates already stay in-state after graduation (maybe not Bowdoin grads, but certainly University of Maine grads do). So if you offer 15k/year to everyone who remains in state after graduation, you're not only paying the people you newly induce to stay in-state, but also the much larger group of graduates who would have stayed in state anyway. So it would get pretty expensive.
I mean you could adjust the numbers some, but a quick google search says that instate tuition for U of Maine is 9k, while out of state tuition is 29k. My point is that they should flip that around so that it costs 9k if you stay in state, and 29k if you leave the state.
The key point is that you subsidize people who stay and pay taxes in your state, not those who happen to live in the state before they went to college.
Right, but to make that work you'd have to charge in-state students 29k up front, and that would be... unpopular. And would probably affect enrollment.
Maybe - though at the rate that young students are taking loans, I'm not sure that many think deeply about the costs. For older people, I think it could actually be better if the state agreed to pay off more. It would also incentivize finishing the degree immensely.
Interesting take on the situation, and one that I would like to send to (a very likely non-subscribing) friend of mine who served a few terms - and I think may do so again - in the Maine House of Representatives. He was a proponent of Maine's new ranked-choice voting scheme, and so not afraid of new and weird ideas.
A couple thoughts:
While it's true that "reluctance to officially give up on the idea of a massive revival in the paper industry" is a part of what drives resistance to the idea of an upcountry national park, there is also a strong feeling among many that by making it a *national* park Mainers would be giving up too much to the authority of the federal government.
Likewise, environmental considerations are a part of the opposition to the CMP Corridor. But there is also a strong attitude that since the project will ultimately benefit Quebec and Massachusetts, and really no one else, why should Maine allow the use of its land?
There would also be pushback on the tax policy changes put forth here. Why would those in Maine's First District (the southern, denser, and much more prosperous part of the state) agree to share their relatively higher land valuation tax payments with the rest of the state's communities? Why would those in Maine's Second District (northern, rural, and used to getting beat up pretty bad economically) agree to let sales tax revenue be spent in the areas where its collected rather than going to the state's general fund? Yes, compromise is possible. But it's hard. (Hard boards, maybe?)
They literally just sponsored a developmental PGA Tour tournament called the “Live and Work in Maine Open.” Maine and all of its midsummer beauty was just on TV for every golf fan to see.
Hopefully a lot of people in their 30s and 40s said “Man… the second my parents move to Florida. I’m gonna start thinking about working remotely in Maine.”
>>>...there are plenty of people moving around, and capturing a relatively small share of them could be a complete game-changer for the state.<<<
I'm sure more people WOULD move to Maine if it weren't for the fact that you can't get theyah from heeah.
I personally know a fancy ad executive who's now based in Maine. No need to live in NYC. He just commutes to Manhattan and to his Midwestern client account every so often. And why not? It is beautiful.
I would think the biggest problem with fully moving to Maine would be dealing with winters up there.
I've spent a lot of time "Down East" (in my particular case the Maritime Provinces more so than Maine) and my take on the region's weather is that what's difficult is the chilly spring, and how it seems to extend well into the summer. The winters in that part of the world aren't all that much more severe than, say, metro NYC, if we're talking about the coasts (interior is a different matter). But at least further south in the urban sprawl you know you're going to be rewarded before too long with some warm spring days, and eventually some hot, muggy weather (I never minded the heat/humidity in Boston too much both because it's a lot less severe than some places and also because it doesn't last long, so I tried to appreciate the 10-12 weeks of the year when the weather in southern New England is subtropical).
But Down East you can get damp, chilly rainy days extend into July on occasion. Southerners who come up in mid summer might marvel about how lovely the weather is, but they haven't gone through what the locals have (the latter might be pining for some nice hot days -- not trying to get away from them!).
One of the good things about more remote work is it makes cold weather less bad. Not having to commute in bad weather would make the climate more manageable.
meh. when i work from home, i prefer to be poolside and shirtless
they might get warmer, but they won’t get brighter. best solution is to winter further south and go up there 3-4 months a year. with remote work, more people will be able to do that.
Not for long, though. And they’ve already become noticeably milder in the last 10 years.
Eh. Tennessee over Maine. Better weather, especially in winter. And no State Tax. Still easy to get to NY and other cities.
Alternative is Black Hills, SD. Also zero Tax.
Nice areas of Wyoming are expensive. Same with Nevada.
I have a cabin in Eastern Oregon. Underappreciated, but high state tax.
I was looking at Maine property a few years ago. Was so cheap. I should of lept, but so far away from Boise.
Also… my guess is most Mainers have no desire to overtly encourage more people moving there.
Boise and surrounding areas are becoming pretty big remote work locations. Direct flights to West Coast cities.
My coworkers… 100 travel, live anywhere… 16 of us live in…
1 Az
1 ID (me)
1 OK
4 Florida (no tax)
3 Tn (no Tax)
1 Mn
5 Tx (No tax). (1 has a house in Wisconsin… but splits time… claims Tx)
All the non-tax staters are there because of family ties.
When you say "no tax" is it like TX where there is no state income tax but property taxes are 3x what they are in states with income taxes?
Property tax varies more within state than out.
The three highest property tax states are New Jersey, New York, and Connecticut. All three have pretty high income taxes. Florida property taxes are much lower than New Jersey’s and there is no income tax.
The top three are actually NJ, IL and NH.
It's also important to look at metro area tax rates not state averages. The property taxes in Greenwich CT are 1.1% vs. 3.75% in Austin for example. Ah but prices are lower you might say. The ongoing boom in Austin has narrowed that considerably.
Yes, of course, if you want to live in the cool area you’re going to pay more. Same in Maine.
Property tax rates don't increase with demand. San Antonio/Bexar County (where I grew up) has a higher average property tax rate than Austin/Travis County, even though the latter is considered "cooler" than the former. Chicago, relative to other parts of Illinois, has less onerous property tax rates on the whole.
It's also probably easy for a place like Greenwich to keep rates low because the total assessed value, relative to population, is really high (I'm guessing).
“Property tax rates don't increase with demand.”
Property taxes are not connected to price?
How do the assessments of the property values compare? What are the actual raw tax intake numbers per $1,000 of market value? States enjoy playing games with assessments and mill rates.
Edit 2.75%
"... Oregon. Underappreciated, but high state tax."
High income tax but low property tax and no sales tax.
Yep. I make my big purchases there. Bought my quad. And my property tax is like 300 a year. Or something crazy low.
Eastern Oregon is going to blow up one day. Joseph. Sumpter. Baker City. John Day.
Dallas is less than 3.5 hrs by plane from most places in the continental US. No state tax. Better BBQ than Tennessee too.
Yes. But Dallas is ugly. And hot. And flat.
Posting this because of the mention of land value tax:
https://www.youtube.com/watch?v=1fzk_Sc4bBY
The land! The land! 'Twas God who made the land!
The land! The land! The ground on which we stand!
Why should we be beggars with the ballot in our hand?
God gave the land to the people!
(But srsly tho, LVT is a good idea and why don't more places do it?)
MY basically views timber workers as an anachronism who should accept that their industry is dying and understand that the focus of politics will be accommodating their betters for the greater glory of the tax base. Isn’t that a little cavalier? It’s about as politically astute as Democratic support for Nafta or the TPP. It creates space for Republicans to lock down the working class vote through hollow appeals to nostalgia.
I thought Matt’s schtick was packaging progressive politics for a broader coalition that includes working stiffs. In that spirit, forestry is a competitive industry and minor cost differences can confer a competitive advantage. Why not use increased tax revenues from new residents to subsidize forestry jobs. Make it transparent, eg a $2 bonus paid directly to forestry workers for every hour they work up to 40 per week. This would let private employers offer lower wages and beat foreign competitors. The proposed national park is so far from the coast it wouldn’t be of much value to most remote workers anyway. Let the inland people maintain their lifestyle and use tax revenues from the coasts to gently subsidize it. Everyone wins.
The Maine paper industry died due to the rise of the Internet and a declining need for paper, among other things. A $2 per hour bonus is not going to have any effect- the jobs are mostly gone, permanently. Your suggestion would be about as effective as other protectionist schemes, which is to say not at all.
The industry also had unusually aggressive/confrontational unions, which simply hastened their early death. Maybe a lesson for unions there
It’s hardly apparent that the forestry industry is in terminal decline. Yes demand for newsprint is down, but most paper products are toilet paper, paper towels, boxes and the like. Demand for building lumber has increased and Maine is well positioned to export to Europe and even Asia. Weyerhaeuser had higher revenues in 2019 than in 2010. It’s not a growth industry, but it’s a big industry that could stay visible with subsidies.
If companies could make toilet paper, paper towels and boxes from Maine lumber right now, they'd probably already be doing it, nah? If not, I don't think that a $2 an hour subsidy is going to be what tips them over the edge
The few paper mills that still manage to make a go of it in Maine make niche, high-value add products. And even then it’s a close thing. There’s a mill in Skowhegan that makes a specialty product: A coated paper intended for food packaging, FDA compliant and 100% recyclable. They are profitable but still had to cut 200 jobs and then petition the city for property tax relief. Their property tax bill was cut by $1.2M annually. In a city with 3,700 households.
“…among other things.”
Not least the comparative advantage that places like Georgia have due to longer growing seasons. Pine trees just grow faster in Georgia than in Maine.
With the right payoffs to the right politically connected industries, the laws of physics, agronomy & arithmetic can be suspended Ken. We'll bring back the buggy whip industry while we're at it too- killed by unfair competition from those newfangled 'automobiles'!
Maybe the state could subscribe every household to the local newspaper and mandate that the publishers use only Maine-made newsprint.
That makes Maine timber land less productive. It doesn’t make the workers much less productive as most of the work occurs at fixed stages of tree growth. It just spreads those times out and increases the ratio of land to workers
Have you ever seen a modern tree harvesting machine in action. Amazing. One man and a tankful of diesel can do the work of a hundred 18th Century lumberjacks, and he doesn’t even have to live on site. (It’s much more environmentally sound, too.) The land:worker ratio has been dramatically increased by dramatically cutting workers.
>>>Isn’t that a little cavalier?<<<
Far less so than someone like, say, JD Vance, who espouses policies that will leave such workers high and dry. Trumpian rhetoric doesn't pay the bills. Strongly robust redistributive policies can enable working families everywhere to enjoy a high quality of life. You're right the politics of this are tricky, though. But that doesn't mean we should eschew advocating for such policies in favor of stuff that's not going to work. (Every high income country has seen de-industrialization — and a concomitant decline in the share of the workforce engaged in related jobs: the US is hardly alone here).
The cultural conflict here is that many knowledge workers want the timber industry to die (or go somewhere else) because they would rather have huge parks than forestry jobs. I’m totally for protecting old growth forests, but Maine has very few of those, it’s been logged for 250 years. There are lots of mature second growth trees than can be harvested and replaced with seedlings. The carbon impact isn’t even that bad.
"It’s about as politically astute as Democratic support for Nafta or the TPP."
This is an apples to oranges comparison. NAFTA doesn't happen without political support. Paper companies are cutting back regardless of political support. In places with dying paper industries, all politicians loudly announce their support of the industry. However, there's not much to be done. In principle, it could be portrayed as political instead of economic (like coal), but this is harder to pull off because, again, all politicians loudly support it. Politicians can say, "Look, I support the industry as much as anyone, but there's only so much we can do, so let's think about plan b."
“…accommodating their betters…”
Slap that bumper sticker on your Connecticut-registered car and take a drive to Maine and see what happens. Bonus points if you leave a Yankees cap visible in the rear window.
So, as a form of welfare you want to subsidize an industry that would otherwise be uncompetitive or non viable.
I didn't read this article to be about political strategy or how to deal with political constraints. It's just saying "this is good policy." Politicians obviously should only bite off as much as they can chew.
Maine is lucky to have a one-man policy think tank in Matt.
He needs a cutout. He’s an inside the beltway creature, NYC born and raised, and Harvard educated. Three strikes.
If LePage gets back in, I seriously hope Matt considers throwing his hat in the ring for '26.
Oh man would that be amazing for takes. The real-time content it would generate for this substack would be can't-miss. Like Hunter S. Thompson running for sheriff or William F. Buckley for mayor, but in the social media era.
Buckley's brother ran for mayor. Of NYC.
I can't even take on that
In a better world, Matt would be a strong candidate for elective office.
Realistically, I think that "a large influx of full-time and part-time remote workers is good for the state and we welcome it" would be a hard attitude for many Mainers (and people of other regions) to adopt.
What this means for them specifically is that "a bunch of people who are probably either younger than me, richer than me, or both, are going to come to my state and use their influence to change it to fit their preferences rather than mine."
Most people don't like change unless they find their personal circumstances intolerable. They especially don't like change in the place they think of as their ancestral homeland because that impairs their connection to their own past.
People who advocate for big social changes need to do a better job of combating nostalgia. Too often, though, they foster and rely upon nostalgia as an argument for why the CURRENT state of affairs is unacceptable. It's a weird kind of progressive conservatism, and it tends to breed NIMBYism.
I'm a Mainer, although I don't live there anymore, and I basically think this is right on all points. Two little quibbles:
1. I wish you had talked more about immigration and refugees, which have been significant in parts of Maine, particularly Lewiston where I'm from but also Portland.
2. One issue with transmission lines specifically is that the scenic mountains extend all the way across the state, so anything coming from Quebec has to go through nice places at some point. This has been an issue in New Hampshire as well.
God I can't believe it corrected live to like.
Just a reminder for remote workers - if you're working remotely in a state with an income tax you need to pay taxes in that state. Even if you're only there for a week. I expect states to crack down on this. You don't want to get a letter in 2 years from state X saying you owe $x,000 plus interest and penalties.
It depends on the state. Some have thresholds. I work all over the US. Generally I try and avoid 30-days in any single state.
Not critical though. Idaho has state tax. Just gets deducted 1 for 1. Usually. Extra paperwork.
Court decisions pending, you might have to pay taxes in Mass as well as your home state if your company is located there and you work remotely from another state.
You would take a credit on the one state against the other state, no? So functionally you just end up paying the amount of tax owed to whichever state has the higher rate.
Not necessarily. That only happens if your state of residence has a tax reciprocity agreement with the other state, which not all states do. For instance, Pennsylvania and New Jersey have tax reciprocity, so if you work in Philly but live in South Jersey, it works the way you say. However, PA and New York don't have such an agreement, so if you live in Northeast PA and either work in like Binghamton or take the long commute to NYC, you pay full tax to both PA and NY. The same applies if you just decide you like the view in the Poconos or the cheaper rent in Philly and decide to telework your NYC-based job. (There's some other stuff going on about nexus depending on whether you're required or allowed to telework, which is what Otis and BZC were talking about, but this is the baseline.)
(I'm a local tax attorney in Philadelphia, this is sort of my bread and butter. These issues have occupied our local bar association's tax section since last March, but they were big even before then.) (Deleted prior comment because revisions)
I've read quite a bit about NY and NYC specifically trying to recoup people who went remote. I'm just don't understand the legal rationale. If you live in another state and don't spend time in NY, what is their legal standing to tax you? Would you be able to provide a brief overview or pointer to somewhere that does?
The question is "nexus," which is one of the most headache-inducing concepts in tax law. Basically the question "where is the work being done" is surprisingly hard to answer. Seeing as it's 6 pm on a Friday, I'm too tired to fully explain it now, but yeah. "Nexus" is your Google search term.
When I was an employee with significant domestic business travel, our HR and Finance people used send us form memos annually about state tax related to business trips. It seems that most people working with a national or regional client base -- management consultants, lawyers, engineers -- would be need to complete state tax returns for any state that they worked in for more than a day. I expect that compliance rates were quite low. Someone told me that the main targets (apart from interstate commuters) were high earners with public schedules e.g. professional sportspeople and entertainers.
Glad to see the land value tax, one of my pet policy ideas, get some love. There's definitely room in the takes market for more Georgist writers.
I've heard that the tax situation for people living in one state but working for a company located in a different state can be hell. This is really something that needs to be addressed, but I'm not quite sure how.
Multifamily real estate investor here. Wednesday night I did a webinar for our passive investors about how the remote work trend offers great opportunities for flyover country. As part of it I linked to a site that tracks places that will pay you to move there.
From an economic development perspective, it's a much more efficient approach. Instead of focusing on tax incentives to get companies to move, just spend money on people.
https://www.makemymove.com/articles/find-the-places-that-will-pay-you-to-move-there