My Turn: Who benefits from New Hampshire Advantage?
Vermont’s unemployment rate has been running consistently below New Hampshire’s. In the past 12 months, Vermont’s rate averaged 5 percent while New Hampshire’s was 5.3 percent. This despite the presence in Vermont of both a personal income tax and a general sales tax and the absence of proximity to Massachusetts’s high-tech industries in the Greater Boston area.
In just what way does the New Hampshire Advantage provide an advantage to the local economy? Would not an inquiry into the relative economic environments in the two states be of interest? If so, who better than to undertake it than the ace investigator and columnist, Grant Bosse?
He will find that Vermont’s personal income tax has some interesting features, principally the renter’s rebate, a similar program for homeowners known as the property tax adjustment claim, an earned income credit, and a child and dependent care credit. These are scaled to lower incomes; for example, the renter’s rebate phases out at $47,000 of household income; the property tax adjustment at $97,000. A simple example may give readers the idea.
A single person with income limited to wages of $20,000 a year paying $800 a month in rent for the whole 12 months of the calendar year will find that when she files her Vermont return she will be entitled to a renter’s rebate of $1,116, according to a helpful staffer at the Vermont Tax Department. As she would owe $375 in Vermont taxes before the rebate, Vermont will send her a check for $741. That would defray a large fraction of her federal tax of $1,154. Or, it would typically cover far more than it would cost her for purchases subject to the 6 percent sales tax. (Calculations are based on 2011 tax rates.)
With examples like this available, low- and moderate-income residents of New Hampshire might be excused from pondering this question: Just whom does the New Hampshire Advantage advantage?
(James H. Hunt lives in Concord.)