September 24, 2012
Steven Winter represents
the towns of Newbury and Sutton, Merrimack District 3, in the NH House of Representatives.
Representative Winter is a member of the House Executive Department &
Administration Committee, The Special Committee on Public Employee Pension Reform and the Joint Legislative Committee on Administrative Rules (JLCAR).
Former State Senator Mark Fernald writes in these spaces that the answer to high property taxes is to institute an income tax. If that were true, we would have already done it. But the citizens of New Hampshire are not fools. They can look at the results of such efforts in other states which are the Petri Dishes of ideas for our country.
Like in a Petri Dish, ideas grow to see what bears fruit. Using the states as test beds for ideas, our country as a whole learns what works and what doesn’t. Unfortunately for Sen. Fernald, the idea of replacing high property taxes has indeed been tried in a number of different states and found wanting.
The states around us have all attempted this maneuver unsuccessfully. Do you remember Act 60 in Vermont? I have neighbors who moved from Vermont to New Hampshire because of Act 60. It raised education taxes for wealthy towns and individuals who became “tax refugees”, moving to New Hampshire to escape that onerous act. That is one thing to remember about “taxing the wealthy.” They have the ability to vote with their feet by moving out of high tax areas to low tax areas. While the property tax in NH is higher than Vermont, the total taxes are considerably less.
The two most egregious examples are Connecticut and New Jersey. When I first began working in New York, all of my contemporaries lived in either of those two states because there was no income tax in either in the 1960s. Over the years, income taxes were established to “lower the property taxes.” Now, the citizens of those two states have the highest property taxes in the nation plus
an income tax. If you give politicians more money, they will ingeniously find a way to spend it.
Sen. Fernald boldly states that “The founders of New Hampshire would be shocked to learn that we levy huge property taxes on people with modest incomes.” How many folks do you know that have $1,000,000 homes but are unable to pay their taxes? Large homes are the result of large earnings, either by investments or personal earnings.
He goes on to say that “in two years your property taxes will be 5 to 10 percent higher, and in 12 years they will probably have doubled.” Really? Where can I get a crystal ball like that? What he says may be true – but only if we have another
four year span as we saw by the Democrats in 2006-2010. They increased spending by 25% which, if continued, would have been unsustainable without a broad based tax.
The Republicans in 2011-2012 reduced spending from the Democratic years by 11%. They did that by making very frugal and accountably revenue estimates and then creating a spending plan to match the revenue. How novel!
Former Governor Meldrim Thomson said it best, “Low taxes result from low spending.” Pooh-pooh the “New Hampshire Advantage” all you want, but election after election has proven that the taxpayers of New Hampshire are not fools. They do not want an income tax or a sales tax. Every Democratic candidate who has championed a broad based tax, including Sen. Fernald, has lost the election.
We neither need nor want an income tax or a sales tax. We merely need to reign-in state spending by continually prioritizing our wants and needs. We can and do fund legitimate needs like safety nets, primary social assistance, infrastructure, basic education and public safety. But we must leave the “wants” to private donations, churches and other social charities.
Due to frugal governance, New Hampshire has one of the lowest total tax costs in the nation – for everyone. Let’s keep it that way.