The Notorious Kitten and Puppy Tax

September 1, 2005

From today’s Portsmouth Herald:

WATERVILLE, Maine – Dog and cat breeders are unhappy about a new $25 tax on the sale of puppies and kittens, saying it imposes an additional burden on legitimate dealers. The tax takes effect in October.

The state imposed the levy to pay for spaying and neutering programs for dogs and cats that belong to low-income Mainers. The new fee could raise as much as $34,000 a year, most of it from puppy sales, according to Susan Hall of Spay Maine, a group that supports the tax. Hall said the tax will help reduce suffering by animals.

Some breeders say they are already put at a disadvantage by competitors who fail to register their businesses with the state and don’t collect or turn in sales taxes on the animals they sell. They say the “backyard breeders” and “puppy mills” probably won’t pay the new fees either, putting legitimate breeders at a further disadvantage.

The tax is not charged on spayed or neutered pets, but that’s of little consolation to breeders, who say animals that can’t reproduce are less valuable.

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The primary goal of such a program is to limit the population of dogs and cats via a tax on their sale, and in the process, raise funds to finance the government’s role in the population control procedure. (Note the fact that the tax is not levied on spayed or neutered pets.)

We will give the politicians from the State of Maine credit for one thing – they are at least acknowledging that taxes matter and deter consumption and production in the market for animals. Too bad they have thus far failed to realize that fact in the taxes they impose on businesses, workers, and consumers throughout the rest of their economy.

Maine was ranked 42nd out of the 50 states in 2004 in the Tax Foundation’s State Business Tax Climate Index. From its analysis of Maine: “Estimated at 13.0% of income, Maine’s state/local tax burden percentage has ranked as the nation’s highest each year since 1997, and remains well above the national average of 10.1%. Maine taxpayers pay $4,309 per-capita in state and local taxes.”

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