My Turn: Think of taxes as buying a product

For the Monitor
Published: 10/22/2017 12:24:55 AM

‘In this world nothing can be said to be certain, except death and taxes.” That saying is attributed to Benjamin Franklin, but it’s a certainty we all share.

We all dread April 15, the day the government gets to reach into our pockets and help itself to a handful of our hard-earned income. One of my friends resists taxes so hard she takes every extension possible till her accountant tells her she’s out of time.

Taxes on income are not the only problem, however. I recently discovered that my escrow for this year was about $1,000 short. What happened, I wailed! My property tax had gone up.

Property taxes, especially in a state like New Hampshire, where they are the primary source of income for the state, are a real problem.

I recently visited a cousin who lives in Falmouth on Cape Cod. Falmouth is a town with many attractions and amenities, and he has an attractive, medium-sized home and spacious lot that backs up on a picturesque pond. Yet, his property tax is only $2,000 more than mine for my small Cape on 1.3 acres in the country.

My cousin is an orthopedist. He makes a good living and doubtless pays a substantial amount of income tax. If his next-door neighbor is a school teacher who makes considerably less than a doctor, he may pay approximately the same amount of property tax but much less income tax. So his total tax expenditure is equitable.

I know the subject of income tax is taboo in New Hampshire. Candidates for governor regularly “take the pledge” not to propose one. But avoiding an income tax creates a kind of land-poor economy.

Consider a comparable doctor and teacher with comparable properties here. If all taxes were based on land, the teacher would pay proportionally much more than the doctor. And this is even truer for longtime residents who have perhaps inherited family farms or homesteads but no longer have the income – or are on fixed incomes – to afford high property taxes on their land.

There are many places where we see the inequity that arises from relying solely on property taxes.

Schools have always been in the forefront of this problem. Towns where jobs are scarce and wages are low – New Hampshire still has only the federal minimum wage of $7.25 – must try to wring the necessary funds out of people’s land.

I attended a very contentious town meeting once where a woman exclaimed in genuine despair, “We want good schools, but we can’t afford them!” That’s pretty heartbreaking.

A while ago, I talked with a man who had a landscaping business and was doing some work for me. He lived in an old mill town where many of the properties had been turned into rentals, and the taxes on those people who owned land were some of the highest in the state.

I asked him if he didn’t think an income tax would provide him some relief, but he replied, “What makes you think the property taxes would come down?”

That kind of cynicism is very understandable but also heartbreaking.

For a long time now, most of us have not felt our government was looking out for our best interests. It may well be true, but we have push back, to make change.

Recently, I read a book called Viking Economics: How the Scandinavians Got It Right by George Lakey. Because of their extremely comprehensive economic and social policies, Norway, Sweden, Denmark, Finland and Iceland are often perceived by Americans as socialist, a designation many of us have always feared.

But their economies are not planned. They are market economies and are thriving.

Unemployment is low and there is a secure safety net for people when they need it with services designed to return them to productive lives as soon as possible.

Well, you say, how is this wonderland financed? Of course we know, and the people of those countries acknowledge, they pay very high taxes. But here’s how one person looks at it. Lakey quotes Wiggo Dalmo, CEO of Momak, a $44 million Norwegian company: “What we’re doing when we are paying taxes is buying a product. So the question isn’t how much you pay for the product; it’s the quality of the product.”

Buying a product! I’d never thought of taxes that way. Of course, as Dalmo also says, the system must be good, and it must be fair, and we know in this country that it is neither. The product we’re offered is pretty poor.

If a product is poor quality, you don’t buy it, but sadly, we’re not in a position to not “buy” our taxes. And we know in our hearts taxes are necessary (think of our roads and bridges.) So, rather than resisting taxes, wouldn’t it make more sense to press for a better product?

Yes, we have to first be sure we start with a good and fair system, and one way to do that is to ask people to pay more tax on what they earn than on the land they live on. That’s an income tax, and doesn’t it feel more fair than what we have now?

(Katharine Gregg lives in Mason.)




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