"An unlimited power to tax involves, necessarily, a power to destroy; because there is a limit beyond which no institution and no property can bear taxation." – John Marshall, McCullough v. Maryland, 1819
We continually hear from some that we need new revenue enhancement or to at least discuss again the structure of taxation in this state. There is no doubt that the discussion of "enhanced revenue" can lead to only a couple of solutions –a tax on earned income (an income tax) or a sales tax.
We have one broad based tax, the statewide property tax (SWPT). That tax created the concept of "donor towns" which pitted one town against another in this great state. As Lincoln said, "A house divided cannot stand."
A new Constitutional Amendment proposed this year, which has passed in the House and is expected to pass in the Senate, will allow the legislature to target funds to those towns that need the money and will finally do away with "donor towns". After passage, the amendment will go to the voters for approval. The governor is not involved in this process.
As noted above, two other broad based taxes are available – a sales tax and a tax on earned income. These two taxes have been debated frequently over the past 25 years, always with the same results – failure.
A sales tax has little chance of passage in New Hampshire. The large malls
close to the borders on most of our interstate highways are not there by
chance. It is obvious that we draw shoppers from adjacent states to New
Hampshire because of our "no tax" sales policies. Those malls
are in high population areas where House members of both parties have the
Some advocate that we institute a sales tax that is lower than our surrounding states to keep the out-of-state shoppers coming. Out-of-state shoppers will not be enticed by a lower tax. They come to New Hampshire because there is NO tax.
Finally, we look at a tax on earned income. The lack of an income tax is the keystone of The New Hampshire Advantage and part of the frequent placing of our state as the best state in the union in which to live. It promotes business enterprise by inducing small business owners to locate here. Small businesses are the backbone of our economy.
On November 2, 2010, the voters of New Hampshire told us to "stop the spending". They did not tell us to find new revenue. They specifically told us: STOP THE SPENDING. This we promised to do. We told the voters that there would be pain in the cuts we would need to make, but that the pain would be spread across the governmental spectrum.
This we have done. Not because we took joy in it but because the
spending trajectory could not be sustained. We have brought this state
back from the brink of a fiscal disaster without raising new taxes,
without bonding our operating costs, and without shifting mandatory costs
to the municipalities.
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