Keep New Hampshire Income and Sales Tax Free

"The Pledge" against a sales or income tax was established in the 1970s by former New Hampshire Governor Meldrim Thomson, and it has served an essential right of passage for any serious candidate for almost every office in the state. Gov. Thomson's Pledge has been vital to preserving the New Hampshire Advantage of low taxes and economic prosperity.

The Granite State Fair Tax Coalition (GSFTC) recently began a crusade against the Pledge. Their largest campaign thus far was putting an anti-Pledge warrant article on ballots of towns and cities across the state, including Salem. They claim they aren't pushing for any particular taxes and that their only goal is to have a "discussion" about "all options" to "lower property taxes." However, it's clear from their warrant article and subsequent advocacy that they desire to eliminate any obstacle to an income tax or sales tax.

The biggest fallacy of the anti-Pledge movement is that the Pledge eliminates discussion of alternatives to the property taxes. Yet a responsible gaming proposal, spending cuts, and incentives for businesses expansion are just some of the many proposals of varying merits which could lower property taxes.

But the GSFTC isn't interested in any of those options. The only "options" the Pledge forbids are a sales or income tax and the GSFTC wants politicians to discuss the options that the Pledge forbids. Logically one can only conclude that the GSFTC is advocating for a sales or income tax.

The GSFTC speaks euphemistically about "considering options" because they know they can't sell a sales or income tax to taxpayers. They focus on "lowering property taxes" to distract from the fact that they really want to impose new taxes, deceptively attempting to seduce fiscal conservatives into supporting their mandate for new taxes. In Orwellian fashion, they even blame higher taxes on those who have pledged to oppose new taxes.

A sales tax would clearly spell disaster for New Hampshire. The second largest revenue stream for the state is the Business Profits Tax (BPT). Businesses in New Hampshire, especially retailers in the border towns and cities, rely on the state's tax-free status to attract out-of-state shoppers. Even a marginal sales tax would so negatively affect local businesses that the new sales tax wouldn't even offset the shortfall in the BPT.

The GSFTC maintains that income taxes have lowered property taxes in other states. Yet even if an income tax lowers property taxes in the short term, it will increase our overall tax burden in the long term. After an initial drop, property taxes will resume escalating along with the income tax, as has happened in every other state who has attempted this course. Our neighbors in Massachusetts and Connecticut know this well.

There is no doubt that there are problems with the current tax system, particularly its effect on seniors. However, there are solutions that don't involve new taxes. For example, a property tax rebate for seniors on fixed incomes who've lived in their home for a given period of time could alleviate their problem, with spending cuts offsetting the loss of revenue.

Finally, to the extent taxpayers determine the property taxes they will pay by choosing how lavishly or moderately they will live. Large mansions generate higher property taxes than more modest homes.

The "options" the GSFTC proposes to solve our tax woes are worse than the problem itself. The only way to maintain low taxes is to control spending. If government spends too much, taxes will go up, and no amount of shifting them around from one form to another will prevent this. Edmund Burke once declared: "The people never give up their liberties, but under some delusion." I hope the citizens of Salem or New Hampshire will not be fooled by the Granite State Fair Tax Coalition.