Pledge Politics Exposed

There's a lot of good data in the link - and (4.00 / 1)

it provides ammunition on both sides.

For example, the nationwide average for states is also very regressive, despite the income and sales taxes elsewhere. And NH isn't one of the ten most regressive (Washington is worst in that metric.)

---

by: elwood @ Sun Nov 22, 2009 at 19:55:52 PM CST

Yes, it is a fascinating study. (4.00 / 1)

It exposes how sales taxes hit the poorest the hardest, e.g., so yay for NH for keeping those to a minimum.

On the other hand, perusing the other states points to the income tax being the most efficient way to raise revenue equitably among earner distributions.  

birch, finch, beech

---

by: Dean Barker @ Sun Nov 22, 2009 at 20:00:07 PM CST

[ Parent ]

Why is more equitable (0.00 / 0)

necessarily better?

80% of people pay about the same rate. The properties they own probably also vary in relative value. This graph shows that a huge majority gets hit at about 5.5% in property taxes.

What are these sales and excise taxes? Smokes and eating in restaurants?

---

by: Alex Gallichon @ Sun Nov 22, 2009 at 20:08:59 PM CST

[ Parent ]

For one thing, if you believe NH is underfunding critical things, (0.00 / 0)

lead paint monitoring comes to mind, the tax structure is tilted to make any attempt to increase revenues generate a firestorm because it hits more voters.

Republicans will consider that a feature not a bug.

---

by: elwood @ Sun Nov 22, 2009 at 20:15:30 PM CST

[ Parent ]

It's politically better (0.00 / 0)

to hose the rich because they're fewer and that's democracy, majority rules?

---

by: Alex Gallichon @ Sun Nov 22, 2009 at 20:24:34 PM CST

[ Parent ]

How is the state requiring the rich (0.00 / 0)

to pay what it requires the poor to pay "hosing" them?

birch, finch, beech

---

by: Dean Barker @ Sun Nov 22, 2009 at 20:30:10 PM CST

[ Parent ]

I mean, that's the argument (0.00 / 0)

I'm hearing: that they're fewer and can be forced to pay a greater proportion of their income. It's not requiring the rich to pay what it requires the poor to pay in absolute terms. The rich pay more dollars in taxes, they just have a lot more dollars so it's less a burden. But in the grand scheme of things, in NH, everyone enjoys relatively low taxes.

The more I travel, the more I think these much hated fees--to use the state parks and to travel the roads--are way undervalued. In poor countries they pay more to do the same, and it definitely hits poorer people more than richer people, but they pay and government services are funded...

---

by: Alex Gallichon @ Sun Nov 22, 2009 at 20:38:46 PM CST

[ Parent ]

can't let this statement pass unchallenged: (4.00 / 3)

..in NH, everyone enjoys relatively low taxes.

The point of the story is that if you make 14K, there's nothing "low" about a tax structure that hits you for 8.3% of that. (And of course, the property tax being as inequitable as it is means that many people are paying quite a lot more than 8.3%.)

For the wealthy, NH has relatively low taxes. For the rest of us, they are high taxes. And in VT, those of us who are low income would be getting subsidized health care coverage in exchange for that 8%. Here, no such luck (except for kids).

---

by: beverlywoods @ Mon Nov 23, 2009 at 13:37:37 PM CST

[ Parent ]

Other than Massachusetts (0.00 / 0)

under prop 2 1/2, where do you have significantly lower property taxes?

OK, after that, you have sales taxes which also disproportionately hit the poor.

My brother makes less than $14K and works in New Hampshire and Massachusetts and pays more taxes in Massachusetts than New Hampshire. If he  could own a house, and if he had a prop 2/12 limited property, property prices are significantly higher in almost all parts of Massachusetts, so he'd still get hit a lot more.

New Hampshire does have relatively low taxes compared to anywhere else in the country, except maybe Alaska. But, we don't have oil and gas, and even if we did, it would be politically impossible to drill for it.

---

by: Alex Gallichon @ Mon Nov 23, 2009 at 18:29:25 PM CST

[ Parent ]

Alabama, Alaska, Colorado, Delaware - (0.00 / 0)

Just skimming the report from the front, all of those states have a lower tax burden on the bottom 20% than NH does.

---

by: elwood @ Mon Nov 23, 2009 at 19:34:49 PM CST

[ Parent ]

NH has some of the highest property taxes in the nation (0.00 / 0)

In this chart for example we are the 2nd most expensive state for property taxes.

http://articles.moneycentral.m...

Plus most states with rates anything like ours have homestead exemptions and meaningful property tax relief for the low income residents. Our efforts in that direction are pitiful.

I feel frustrated reading your comments, Alex, because it seems to me that you are not really reading and understanding the materials here. What's the tax rate in the town where you live?

---

by: beverlywoods @ Mon Nov 23, 2009 at 21:17:05 PM CST

[ Parent ]

In Nashua, (0.00 / 0)

$19.82 per $1,000 assessed property value.

http://www.gonashua.com/CityGo...

So, do I understand this right? If you own a $100,000 house outright, you owe about $2K in taxes. In the absence of a sales or income tax, that's a lot?  

---

by: Alex Gallichon @ Mon Nov 23, 2009 at 21:52:34 PM CST

[ Parent ]

In the northeast (0.00 / 0)

average household expenditures are about $55K. Of our neighbors, Maine has the lowest sales tax, at 5%. So that's $2750 if sales tax is applied to all expenditures, before any state income or property taxes.

Across the border in Pepperell, Massachusetts, where property taxes are relatively low, your $100K buys you less house, and the property tax rate is $12.58 per thousand. So you save a couple hundred bucks in property tax, but that's before all their other taxes.

---

by: Alex Gallichon @ Mon Nov 23, 2009 at 22:11:35 PM CST

[ Parent ]

Here's the link (4.00 / 1)

on the Pepperell property tax rate: http://www.town.pepperell.ma.u...

---

by: Alex Gallichon @ Mon Nov 23, 2009 at 22:12:50 PM CST

[ Parent ]

One small problem (4.00 / 1)

with your example - Maine's median household income is only $45,832. Also, the 5% sales tax does not apply to all expenditures. For example, grocery staples are excluded as well as newspapers, kerosene and propane.  

Also, Maine has a "circuit breaker" program that offers a refund for people whose household income is:

$61,400 for a person who lived alone; OR, $81,850 for a person who lived with a spouse and/or dependent(s); AND

Your 2008 property tax must have been more than 4% of your 2008 household income; OR, the rent you paid in 2008 must have been more than 20% of your 2008 household income.

---

by: NHFlatlander @ Tue Nov 24, 2009 at 07:41:53 AM CST

[ Parent ]

That's why I made the note of it (0.00 / 0)

but it's also exclusive of all other taxes. So, Maine or any other neighboring state still gets more tax out of the individual than NH.  

---

by: Alex Gallichon @ Tue Nov 24, 2009 at 10:24:47 AM CST

[ Parent ]

doesn't matter if you own it "outright" or not (0.00 / 0)

Say you are underwater on your mortgage and owe 120K on that house, and have been laid off from your job that paid 50K and now have a job where you make 14K a year.

Now take 2K out of that 14K and have to pay it in taxes, or lose your house. (And remember, you have no health insurance with that 14K job either.)

That's a lot. It's close to 15% off the top of your income. Have you ever tried to make ends meet on that kind of budget, Alex? What would you do if you had to live in NH on $1000 a month?

---

by: beverlywoods @ Tue Nov 24, 2009 at 07:19:02 AM CST

[ Parent ]

I can't relate to the situation (0.00 / 0)

because I could never make enough money in New Hampshire to be in a position to owe $120K on a house, especially as a sole breadwinner or living alone.

I do have a spreadsheet at home that calculates out whether I could live alone in NH earning $10/hr, and my model demonstrated using year ago or two year ago inputs that I could make a small savings in the short term, which would be eroded by inflation over time. I would have been severely hit by a sales tax, and an income tax would have made no difference because I wouldn't have made enough to owe any (which is not enough of a reason to support one). Property tax is built into rent, and I don't think that would go down under any situation.

And I do have not too distant memories of having felt lucky to have had spaghetti to eat at least once a day.

I don't think an income tax would create more opportunities to allow me to remain in NH. The cheaper places to live in the United States, which have an income tax, also have fewer opportunities for people without any money.

---

by: Alex Gallichon @ Tue Nov 24, 2009 at 10:22:50 AM CST

[ Parent ]

that's exactly the problem with the property tax (0.00 / 0)

You owe it no matter your circumstance of the moment. At least with an income or sales tax (if it's done right), your obligation to pay is reduced according to your ability to pay. Look, we may not all agree on the solution - and I believe strongly there isn't ONE magic bullet; lots of levers need to be shifted until a better system can be found. But we should mostly agree there's a problem.

I can't believe people run for office, knock on doors looking for votes, and say with a straight face "I promise not to raise your taxes" because what they really mean is "I promise to refuse to listen to any other tax proposal that does anything about property taxes you can't afford right now."

Must be a lot of voters out there who also believe in a free lunch and Santa.  

---

by: Salem Blue @ Tue Nov 24, 2009 at 10:42:32 AM CST

[ Parent ]

but the property tax (0.00 / 0)

never disappears

---

by: Alex Gallichon @ Tue Nov 24, 2009 at 11:14:33 AM CST

[ Parent ]

right, but there are remedies that could make it a lot easier (0.00 / 0)

for people to afford it, such as circuit breakers. We don't have a revenue source that would support a significant circuit breaker program though.  

---

by: Salem Blue @ Wed Nov 25, 2009 at 15:05:53 PM CST

[ Parent ]

That's completely misstating me and the data. (4.00 / 1)

What happens to the NH state budget if each income group pays the same 8.3% share as the poorest? That is not "hosing the rich."

---

by: elwood @ Sun Nov 22, 2009 at 20:37:56 PM CST

[ Parent ]

OK--so explain it to me (4.00 / 1)

I'm not following the argument. That's why I ask.

---

by: Alex Gallichon @ Sun Nov 22, 2009 at 20:39:49 PM CST

[ Parent ]

If raising revenues is artificially easy politically (4.00 / 4)

that's bad. Governments spend too much.

If raising revenues is artificially difficult politically that's bad. They don't spend enough.

Regressive taxes make raising revenues artificially difficult - every attempt to raise tax revenues is a cut to the bone of the low income budget.

Progressive taxes could make raising revenues artificially easy at some point. If a solid majority of voters feels no pain when the next program / tax hike occurs, things get inefficient.

All that is loaded with judgment calls - what is "too easy," what is "spend enough." But that's the principle I'm talking about.

(All this assumes that campaign contributions play no role in politics. Heh.)

---

by: elwood @ Sun Nov 22, 2009 at 20:54:02 PM CST

[ Parent ]

A victim of "The Pledge" (4.00 / 1)

The committee report on HB642 is ITL. Here's a simple explanation of benefits of HB 642, if it had passed.

1. It would have produced $496 million in additional revenue.
2. It would have eliminated the Interest and Dividends tax.
3. It would have eliminated the Business Enterprise tax.
4. It would have reduced the Business Profits tax.

The tax burden on the poorest fifth (incomes of less than $24,600) would have been reduced by 1.4% while the tax burden on those whose average income exceeded $1.3 million would have only increased 1.7%.  Hardly a "hosing."

---

by: NHFlatlander @ Tue Nov 24, 2009 at 08:00:56 AM CST

[ Parent ]

When the state can't meet its budget, (4.00 / 5)

it cuts services, raises tuition, shifts burden onto local costs, etc... etc...

The people of the state who can least afford that to happen to them are the same ones paying the most percentage of their income to the state.

So, more equitable = better, imo.

As for the property tax, the graph shows it is functioning the way it property taxes function.

My problem is with the pledge, the main purpose of which is to make the words "income tax" taboo.  It has been very successful, as the chart shows.

birch, finch, beech

---

by: Dean Barker @ Sun Nov 22, 2009 at 20:27:16 PM CST

[ Parent ]

The Only Question Is (0.00 / 0)

When do we hit the tipping point?
Cuts hurt more and more people. There's no where else to cut.
Gambling is being pushed as a panacea...the old: Don't tax me tax the guy behind the tree. But that will only yield tremendous power to one business interest at the expense of everyone else. And its revenue projections are bogus. Costs greatly outweigh any benefits.

When will there be a Democrat to run for governor?
I know I know, Lynch makes it easier for people to vote Democrat, but...

There is no answer but the income tax. No one should pay more, or less, than their fair share.

It is inevitable, it is fair. The only question is when. How much unnecessary pain will have to come first?

No'm Sayn?

---

by: BurtCohen @ Mon Nov 23, 2009 at 09:56:43 AM CST

[ Parent ]

regressive taxes (0.00 / 0)

NH is 6th in percapita income
Nh is 3rd in percapita prop taxes
NH is about 35th in total percapita taxes
Where is NH in the amount of percapita services??
THE NH ADVANTAGE IS THE MOST REGRESSIVE TAX STRUCTURE IN THE NORTH EAST
For those of you that don't know----progressive taxes are----soak the rich
regressive taxes----soak the poor and average

---

by: tchair @ Wed Nov 25, 2009 at 13:54:19 PM CST