State income tax not a good idea for New Hampshire
To the Editor:
This is in response to your Cabinet editorial in the Jan. 5 edition.
I object to your assertion that a bill in the New Hampshire Legislature, which would attempt to trade an income tax for the current property tax, is the fair way to go in this state. It does not seem you thought this idea through.
First of all, the proposed income tax would be a state tax, whereas the property tax is assessed by each individual town/city in the state. It would be impossible, if not unadvisable, for the state to transfer all income tax receipts to each town/city’s fiscal requirements. If that were to occur, what would be the point of town budget hearings and town meetings, if the state was going to just pass all the revenue requested to each town? Anything less than 100 percent transferred to each town would require that town to obtain the remaining revenue from a property tax.
Secondly, the property tax pays for each town/city’s operating expenses, school expenses and county expenses. Do you really think a 3.9 percent tax on income, administered by the state, could possibly pay for all 240 municipals’ expenses?
If I read your proposal correctly, you do propose switching one tax for another on the assumption that it is fairer. Is it fair that those who are unemployed or retired will be paying very little, if anything, to support the local government, but will still be able to use all of those communities’ services (especially recreation, emergency services, road repair and especially the schools)?
My guess is that the proposal you are referring to will give some of the needed revenue from the income tax back to the local communities, but certainly not all, probably not even the vast majority. Hence, there will still be double taxation, e.g., the new income tax and the lowered, but still there, property tax.
Look at the states that most recently passed an income tax and tell me that the taxpayers, rich or poor, aren’t paying more. Most notable is Connecticut, which now has one of the highest income tax rates in the country, as well as one of the highest property taxes in the country. How about New Jersey? When I lived there many decades ago, there was no income tax, and property taxes were high. Now there is an income tax (far more than the 3.9 percent proposed for New Hampshire), and property taxes are still high (I know because I ended up selling my house in New Jersey, which I was renting after my move to New Hampshire, partly because of the high property tax).
Ask any resident of any state that went from no income tax to instituting one what their total taxes ended up being after a few years’ time. No citizen should ever vote to have an income tax imposed on them unless they feel the state government could actually pull off transferring that tax to eliminate another.
I suggest you go back to the drawing board on this one, and hopefully the Republican majority in Concord will protect the taxpayers who elected them.