Not a burden: Keep NH government a light load

Manchester Union Leader ^ | April 13, 2004 | Editorial staff

[Final Authority]

Not a burden: Keep NH government a light load

THE BEAUTY of federalism is made plain each April, coincident with the melting of New Hampshire snow and the blooming of cherry trees in Washington. This is the month the Tax Foundation, a non-profit institute that supports limited government and low taxes, releases its annual ranking of each state’s combined state and local tax burden. The tax burden is the percentage of personal income paid in state and local taxes in each state.

As usual, New Hampshire imposes one of the lightest tax burdens of any state in the country. This year we rank 49th out of 50, with only Alaska, perennially in last place, below us. That’s down one notch from 48 five years ago.

Alaska’s lowest ranking is misleading, however. It is a state that uses oil revenues to subsidize its government, so it is able to keep taxes low by tapping a natural resource unavailable in most other states. New Hampshire ranks so low because it constrains its government more effectively than does any other state, including Alaska.

How do our neighbors fare? Maine is No. 2 on the list, with a total tax burden of 12.3 percent. It was No. 1, but was bumped down a notch by New York, which tops this year’s list at 12.9 percent. Vermont is No. 12, with 10.4 percent. Massachusetts, believe it or not, has fallen to 36th, down from 27th five years ago, thanks to cuts in income and property tax rates.

If New Hampshire had nothing to offer but low taxes, it might make sense to live in Massachusetts. But our quality of life is second to none, and Granite Staters aren’t the only ones who think so. New Hampshire was ranked the healthiest and the most livable state in two separate reports this year. And that was before the Fisher Cats or the Wolves started their seasons.

New Hampshire did not become, nor can it remain, the state with the best-constrained government by accident. It takes constant vigilance to keep government in check and the tax burden low. Everyone, from the governor to selectmen to voters, has to work at making government in New Hampshire as efficient and unobtrusive as possible. We have a beautiful situation here. Let’s not mess it up.

[Final Authority]

Much can be learned from the study of the government of New Hampshire. The State government makes up a small part of the total however, and this is good. Last night, in a selectmans meeting, the police chief was explaining how he wished to spend a total grant offering of about $25K from the Department of Homeland Security for emergency vehicles. (4X4 ATVs) The town in deliberative session placed on the warrant and voted in favor a figure of $13.5K as this was the number the previous chief requested. The new chief was told by the feds that he could use all $25K as this was the new offer. The selectmen told him to stick to the $13.5K as this was the voters number anyway and only spend more on two conditions, the feds cut a check in advance and the increase for more equipment is discussed in public session. Imagine, we even sweat spending other folks money, afterall, in NH we understand that it is indeed all of our money that we spend, as the government hasn't any.

[Final Authority]

check it out

[2banana]

New Hampshire is nearly all white. Don't know if that has anything to do with it...

[sheltonmac]

"The Free State Project is a plan in which 20,000 or more liberty-oriented people will move to New Hampshire, where they may work within the political system to reduce the size and scope of government. The success of the Free State Project would likely entail reductions in burdensome taxation and regulation, reforms in state and local law, an end to federal mandates, and a restoration of constitutional federalism, demonstrating the benefits of liberty to the rest of the nation and the world."

[IYAS9YAS]

I'm moving to NH soon and love the fact they don't tax wages. But why property tax? Why not a sales tax? With so many visitors, the burden would/could be a lot lower on the locals and you don't have to worry about the taxman taking your property because you didn't pony up your $4,500 (give or take two grand) a year. Or are the outrageous property taxes just in the southern part of the state?

[SecularisX]

I always feel like I have to reply to New Hampshire love-fest threads. As a 15 year resident, I have to say I continue to love the state more and more - both for its quality of life and the ethic of civic-mindedness and personal responsibility of its people. A big welcome to FR freestaters.. we're glad you're coming.

X

[SecularisX]

As for property taxes, if you're around any of the larger population centers they are going to be high.

As for having no sales tax, isn't it possible that's one reason why we have so many visitors? Not that we don't have plenty of other perks, but it makes for a great marketing tool.. and keeps the folks in neighboring states running across the border for their liquor, and choosing to shop in our malls over those in their home states.

X

[nh1]

Although NH does not tax wages, it does tax profits.

If you are self employed, you do not earn wages, your company earns a profit. These profits are taxed, the taxes are significantly lower than income taxes in neighboring states, but it's still a tax.

[Redbob]

"Why not a sales tax? With so many visitors,..."

I'm always astounded to run across these "tax the other guy" arguments on a supposedly conservative website.

[Redbob]

Perhaps you might just refer to "the lack of a large population sement having an entitlement mentality..."

[Redbob]

"sement" = segment

Arggghh!

[IYAS9YAS]

The only reason I say that is the other guy is using services in your state when visiting. How do you think Nevada keeps afloat? Not on the backs of its own folks. A sales tax would broaden the burden to all using NH's services. If they don't buy anything, they don't pay taxes.

What I was talking about is that, as a conservative, I would rather be taxed on what I consume. Personally, I think property tax is immoral. It is based on someone's idea (not the market of buyer/seller agreement on price) of what your property is worth and you can lose your home if you can't pay the property tax.

It's funny though, they don't have a sales tax, but rent a hotel room or eat out (aimed at those who don't live there) and you have an 8% tax on your stay and the food you consume.

[IYAS9YAS]

Hey, nh1, what's it take to register your car each year? That's about the only cost I can't get figured without making a long distance call. I pay about $40.00/year for a newer car (2001) here in Idaho.

Am I going to need a crash cart to restart the old ticker when I go to register?

Also, what's happened on the bill to allow any law-abiding citizen to carry concealed without a permit?

[crv16]

But why property tax? Why not a sales tax?

You (as a taxpayer) have more of a voice when taxes are collected and spent at the local level. The higher up the ladder tax collections go, the smaller your voice becomes.

[crv16]

Hey, nh1, what's it take to register your car each year? That's about the only cost I can't get figured without making a long distance call. I pay about $40.00/year for a newer car (2001) here in Idaho. Am I going to need a crash cart to restart the old ticker when I go to register?

Yeah, car registrations are expensive in NH. My '03$22,000 minivan cost somewhere around $400 to register. It drops about 20% each year though, as your vehicle ages.

[IYAS9YAS]

So, does the property tax stay in the city/county in which it is collected? Or does it go into a large pot for the state? If it is the latter, it doesn't differ from sales tax. Again, I think sales tax is more legitimate and moral than property tax. Don't get me wrong, I'll gladly trade the higher property tax for no tax on wages. Even profits are taxed at a lower rate in NH than here in Idaho.

[IYAS9YAS]

Is it based on a percentage of the value? Or just on the age? Combo of both? With a 6% sales tax rate on car sales/leases here, the difference in registration won't be too awful bad.

[crv16]

So, does the property tax stay in the city/county in which it is collected? Or does it go into a large pot for the state? If it is the latter, it doesn't differ from sales tax. Again, I think sales tax is more legitimate and moral than property tax. Don't get me wrong, I'll gladly trade the higher property tax for no tax on wages. Even profits are taxed at a lower rate in NH than here in Idaho.

Property taxes, for the most part, are collected and spent locally. A small portion goes to the county.

Up until a few years ago, schools were 90+ percent funded locally. That was until the rats got together and decided to sue the state, due to spending differences between "rich" and "poor" towns. They won with the help of activist state judges (Sound familiar?) So a state wide property tax was instituted, and a handful of "rich" towns really got socked, they had to send some money to the state for redistribution to the "poor" towns. But for the vast majority of towns, they pretty much get back from the state what they put in.

Legislators have come to the conclusion that this has been a failure, because school spending differences still exist. Towns just took the extra money from the state and mainly used it to reduce property taxes, not increase school spending. So over the past few years, the amount collected (and distributed) by the state has been declining significantly. Hopefully it will be scrapped altogether.

Bottom line, almost all money spent locally is collected in the form of property taxes.

[crv16]

Is it based on a percentage of the value? Or just on the age? Combo of both? With a 6% sales tax rate on car sales/leases here, the difference in registration won't be too awful bad.

Yeah, it's a combination of both value and age. Not sure what the exact formula is though. The registration cost is deductible from your federal income taxes (it's a personal property tax), where a sales tax is not. On a 20k car, it will (roughly) start out at about $400 year, and drop down to $60 in 6 years.

[Final Authority]

Not a simple answer for those who do not understand NH but I will try. Tax obligation is for the lifetime of ones life in a society, therefore, paying a high property tax in the elder years should not be considered a burden as when one has children in school the tax burden compared to the cost of school is quite cheap. (about $10K per student X 2.4 kids per family v. about $5K in taxes per year)On the other hand, folks in NH came to live here because of the corruption of neighboring states where increasing the tax base only bloated the government of the state and provided no essential services. A sales tax would do the same and that is why the folks in NH will avoid such broad based tax. As long as we can keep the legislature essentially a volunteer body we will keep the tax structure and this is what makes NH stand like a shining light on the hill.