Outside the so-called "tax summit" organized by the House Ways and Means Committee yesterday, about 25 protesters held signs: "No New Taxes" and "Keep the New Hampshire Advantage."

Inside, many of the economists who spoke agreed with the protesters.

"Don't mess up a good thing," said Scott Hodge, president of the Washington, D.C.-based Tax Foundation. "New Hampshire's tax burden is low. . . . It's an advantage you don't want to mess up at any cost."

In the first day of the two-day summit, 10 economists, including seven from New Hampshire, addressed nearly 100 attendees. A handful of business leaders also spoke. Today, the business presentations will continue, followed by talks from columnists and community activists.

Leading up to the event, conservative activists pounced on the summit as a way for "progressive, big government lawmakers . . . to push their pro income tax and sales tax agenda," in the words of the coalition New Hampshire Citizens for Sensible Legislation.

House and Senate Republicans responded to the summit by announcing a "Stop the Spending" forum for Tuesday to discuss ways of cutting state spending instead of raising revenue. In announcing the forum, House Republican Leader Sherman Packard said of the Ways and Means Committee, "They are holding a summit under the guise of a 'Revenue Structure Informational' session when, in reality, their goal is to study and eventually pass an income tax."

Former Republican state senator and U.S. congressman Jeb Bradley, who attended the summit, said he believes legislators should be focused on lowering the unemployment rate, creating a business-friendly environment, avoiding new taxes and reducing spending. "I don't think raising taxes is the answer," Bradley said.

Many back lower taxes

Despite the criticism, many speakers were committed to either lowering taxes or maintaining them, even as others suggested the need to raise taxes or change them. Armed with charts, graphs and Powerpoint presentations, the group gave a variety of perspectives, many of which conflicted with one another.

The three Washington-based economists laid out the arguments most clearly for and against sales and income taxes. Hodge and Jonathan Williams, of the American Legislative Exchange Council, both urged legislators to avoid a sales and income tax, while Jeff McLynch, of the Institute for Taxation and Economic Policy, urged them to adopt the taxes.

Williams said that comparing states without an income tax to states with high income taxes, those without income taxes have higher levels of income growth, more jobs and more population growth. "New Hampshire enjoys a good brand because of its low-tax status," Williams said.

Williams noted that states that instituted income and sales taxes did not solve their budget deficits. "No state's ever taxed its way into prosperity," he said.

Hodge added that New Hampshire is able to attract people from neighboring states because of its low tax burden. He noted that New Hampshire has among the lowest tax burden in the country, ranking 46th among 50 states. "New Hampshire is to the Northeast what Switzerland is to Europe," Hodge said. "A refuge from oppressively high taxes in neighboring areas."

How to pay for services?

On the other hand, McLynch argued that the current taxes do not bring in enough money to pay for state services without constant attempts to add taxes, change tax rates or receive federal funds. New Hampshire is forced to rely more on business taxes and on actions like increasing the cigarette tax four times in five years.

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