Hassan fought tax cuts, proposing new tax credit

  • Democratic U.S. Sen. candidate Gov. Maggie Hassan speaks to supporters in Manchester earlier this year. JIM COLE / AP file

Monitor staff
Published: 11/4/2016 11:41:31 PM

Democrat Maggie Hassan has built her U.S. Senate campaign around a pledge to lower the tax burden for middle class families by slashing subsidies for oil companies and raising taxes on the wealthiest Americans.

Republicans argue the two-term governor’s record paints a different picture – that she has pushed tax and fee hikes that raise expenses for all New Hampshire families.

So is the “Taxin’ Hassan” moniker actually earned, as Hassan’s Republican rival Sen. Kelly Ayotte suggests?

During her four years as New Hampshire’s governor, Hassan proposed millions of dollars in tax and fee hikes, some of which would have hit residents across all income levels. She outlined plans to use the increased revenue to fund charter schools, the university system and infrastructure costs, among other areas. 

Hassan’s plan as a U.S. senator to give middle class families a new $1,000 federal tax credit would rely largely on raising taxes for large companies.

“I understand how hard middle class families are working and believe that it is long past time that they got a raise,” Hassan, 58, said in a statement.

Her proposed tax credit would apply to families and individuals making less than $200,000 a year, although a single person would receive half the benefit. It’s a new policy that hasn’t been floated or hotly debated in Washington, experts say.

The tax break would likely come at a large cost, but it’s impossible to tell exactly how much. The campaign didn’t offer a figure, and provided too few details for a tax policy expert to calculate an estimate.

As governor

Taxes are a hot topic in Washington, as they are in New Hampshire, where any proposed tax or fee increase provokes spirited debate among lawmakers, interest groups and voters.

On the campaign trail, Hassan regularly touts balancing the state budget as governor without the use of a sales or income tax.

Those broad-based taxes have been historically rejected by governors and lawmakers of both parties in the Granite State. Given those taxes are off the table during budget debates, elected officials often look to raise revenue through fee or tax hikes that are politically palatable.

“It’s not often the question of regressive or progressive [taxes],” said Steve Norton,  Executive Director of the New Hampshire Center for Public Policy Studies. “It’s more a practical question.”

Hassan floated some fee and tax increases that would have disproportionately affected lower and middle income earners. In her 2015 budget, Hassan pitched a 35 percent increase in motor vehicle registration fees to fund transportation infrastructure. It did not pass the Legislature.

Some of her tax proposals echo steps she has pledged to take in the U.S. Senate, like “holding accountable corporations and wealthy individuals who aren’t paying their taxes.”

In her 2015 state budget proposal, Hassan pitched closing an offshore tax loophole that would have stopped multinational businesses from shielding their profits from New Hampshire taxes. The step would have raised an estimated $11 million, but was rejected by lawmakers.

Hassan signed into law a bipartisan four-cent increase in the state gas tax in 2014, the first raise in more than 20 years that funded transportation costs. Hassan has said if elected to the U.S. Senate, she would oppose raising the federal gas tax, which was last increased in 1993 to 18.4 cents.

The biggest tax debate during Hassan’s tenure came over reductions to the state’s two major business taxes, which hadn’t seen a decrease since 1995 and are among the government’s biggest money-makers.

Hassan initially vetoed the state budget, warning the Republican-backed tax cuts included inside could blow a hole in future state revenue. Three months later she signed off on the reductions once they included new revenue safeguards.

“She fought them tooth and nail until she realized that she had to sign a budget,” said Senate Majority Leader Jeb Bradley, a Wolfeboro Republican. “She caved in to our budget, essentially.”

Proposed tax break

In debates and on the campaign trail, Hassan has cited her plans for a federal $1,000 tax credit. Her answer on how she would pay for the policy includes “asking millionaires and billionaires to pay their fair share” and cutting tax breaks for major oil companies. She voiced support for a the so-called “Buffett Rule” that would require people earning more than $1 million a year to pay “at least the same tax rate as middle class families.” The campaign didn’t offer an estimate on how much money those steps would raise.

Missing details would paint a better picture of what Hassan’s proposed tax break would actually cost.

Like most tax credits, this one would be calculated based on income, with higher earners getting a smaller credit. But Hassan wasn’t specific about the formula she would use.

Hassan prefers the credit be refundable, meaning families that have a low tax burden or none at all could receive a check from the government for up to the full value of the benefit – $1,000.

But her campaign said “she recognizes that this would need to be negotiated in the final legislation.” A refundable credit would affect the proposal’s overall price tag.

An estimated 44 percent of households nationwide will pay no income tax this year, according to Roberton Williams, Senior Fellow at the Urban-Brookings Tax Policy Center. If the tax break were non-refundable, it would mean those households would see no benefit even though their incomes fall below the $200,000 cap.

(Allie Morris can be reached at 369-3307 or amorris@cmonitor.com.) 

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