Editorial: Voters must reject state income tax ban
Among the many decisions facing New Hampshire voters on Nov. 6 is a proposal to amend the state Constitution to permanently ban a personal income tax. This is a terrible idea – one that voters of all political persuasions should soundly reject.
Here are seven good reasons why:
1. The Constitution should not be amended frivolously. Amendments should address serious problems or right serious wrongs. The supporters of this amendment surely made a strong political statement by passing the proposal by super-majorities in the House and Senate. But the Constitution should not be used merely to score political points.
2. The amendment is unnecessary. If New Hampshire voters don’t want an income tax, they will elect politicians dedicated to opposing one – after all, they always have. With 424 legislators and a governor elected every two years, it’s certainly not hard for voters in this small state to get politicians’ attention – and to quickly boot them from the State House when they don’t live up to expectations.
3. The amendment is unfair to business. The proposal would ban a tax on personal income. It specifically does not undo the other sorts of income taxes already in effect – the ones politicians try hard not to talk about when touting New Hampshire’s “tax free” advantages. The existing business profits and business enterprise taxes are taxes on income. So is the interest and dividends tax. When future legislators find themselves in need of revenue, the Constitution will allow them to continue to turn to businesses’ and investors’ income; if this amendment passes, they will be prohibited from considering other sorts of income.
4. The amendment is unfair to property owners. New Hampshire’s stubbornly regressive tax system relies chiefly on local property taxes to finance much of what we want from government: good schools, police and fire protection, paving and plowing the roads, prosecuting criminals and locking them up, caring for elderly residents in decent nursing homes. And the burden on property owners has gotten worse in recent years as state government has jettisoned more responsibilities, leaving them to cities and towns, school districts and counties. An income tax ban would leave the state fewer options – guaranteeing that the pressure on property owners would continue.
5. The amendment favors the rich. When government relies chiefly on property taxes, it means that people with high incomes pay a smaller percentage of their money on taxes than those with modest salaries. A future income tax would ease the inequity; an income tax ban would enshrine it.
6. Wall Street won’t like it. The state government maintains a good bond-rating in part because of its fiscal prudence and in part because it uses a relatively small portion of its taxing ability. In other words, in a crisis there are places the state could go for more revenue. If such a big source is off the table, rating agencies might look askance.
7. Who are we to tell future generations what’s best? There is apparently little political will for an income tax in New Hampshire these days. Even if there were, both leading candidates for governor have promised to veto it. But who’s to say what future circumstances might require and future voters might support? New Hampshire has a hard enough time trying to balance the budget and treat its citizens fairly here in 2012; no need to try to solve the problems of 2062 or 2112 while we’re at it. New Hampshire’s children and grandchildren deserve the right to make their own choices, unhampered by the political winds of 2012.
The Republicans who have run the show at the State House over the past two years have made remarkable use of their enormous majorities, passing many new laws even over the veto of a Democratic governor. Next Tuesday’s election will provide a referendum on many of their budgetary and social policy ideas. If voters didn’t like what they got, they can vote for the hundreds of candidates on the ballot prepared to undo much of that agenda. And much of it could be reversed with a simple majority vote and the approval of the governor.
Amending the Constitution is another matter altogether. Amendments are neither easily approved nor easily repealed. The amendment banning an income tax addresses no crying need, rights no grievous wrong, provides no obvious benefit to the state. The wise course, the fair course, the conservative course is to leave well enough alone. Our advice to voters considering Question 1, the permanent ban on a personal income tax: Just say no.