Op-Ed: The great Republican tax heist in New Hampshire

New Hampshire is known for a lot of things. Beautiful scenery, the White Mountains, and sky-high property taxes. Property taxes that always go up, year after year. At Thanksgiving, my fiance’s family and I got into a conversation about why this keeps happening. The answer, it turns out, has everything to do with decisions made in Concord.

Everyone pays them one way or another. Homeowners pay them directly. Landlords pay them and pass the cost along to their tenants in the form of rent. Business owners pay them in their lease and pass that cost along to their customers. 

If there’s one thing the New Hampshire Legislature likes to claim it’s doing, it’s lowering taxes. Bragging about lowering taxes is Politics 101 after all. But the thing about municipal budgets is every time the state legislature gets rid of one revenue source, local city councils have to pick up the bill. In order to continue funding police, EMTs, public schools, infrastructure, and public safety, they have to find funding somewhere.

An example of one of these taxes is the Interest and Dividends Tax which existed for almost 100 years as a way to tax income earned from investments above $2,400 at a 3% rate. By definition, it was a tax that applied to people who could afford to pay it. It brought in $147.3 million to the state every single year that could go towards education and public services. 

In 2021, Republicans in the House and Senate, along with former Governor Sununu, decided to eliminate the tax, even holding a mock funeral for it to celebrate their great success. Except the problem is, 90% of the tax was paid by the top 20% of earners and 58% of it was paid by the top 1%.

Rather than lowering the tax rate or raising the threshold, they eliminated it entirely. Now that it’s gone, municipalities will have to raise everyone’s property taxes to make up for it. The only people that benefited from the Interest and Dividends Tax being eliminated were already wealthy.

Republicans have consistently voted against marijuana legalization which would bring in additional state revenue that could lower your property taxes. Simultaneously pushing for universal eligibility for the school voucher program, taking even more taxpayer money away from public schools and funneling it into private and religious schools.

In essence, Republicans brag that they got rid of a tax while making it harder for working people to afford a home. This is the problem with framing any tax as evil. Taxes fund important programs for everyone, especially those in need, but also the public in general. 

In her budget address, Kelly Ayotte warned of tight budgets and the need for cuts, all while promising to protect the most vulnerable Granite Staters. She also urged municipalities not to raise property taxes, despite the fact that they’ll have no choice if state funding continues to shrink. The facts don’t match up.

New Hampshire is facing a tough budget fight that will ensue during the next few months, but it’s important to remember that this is a budget crisis of our own making. Over 8 years of a Republican governor and primarily Republican majorities in the statehouse and Senate have gotten us into this mess. Essential programs will be cut back, not because we didn’t have the funding, but because we did and Republicans voted to eliminate them.

Are there ways to reduce spending by optimizing government operations or trimming back unnecessary programs? Absolutely, and we should work to make the government more efficient. Is the new Commission on Government Efficiency going to solve this problem? I don’t personally think so, but we won’t know until we see what programs they target. 

The more we keep digging a financial hole for ourselves, the harder it will be to climb out of it. Arguing to bring back a tax that was eliminated is political suicide, regardless of its actual economic implications.

Some may argue that eliminating taxes on the wealthy encourages wealthy people to move here, but it’s worth looking at the flip side of that argument. How many people will leave the state because their rent increased and they can’t afford groceries or childcare anymore? Encouraging wealthy migration is meaningless if it comes at the expense of driving working families out.

New Hampshire’s budget challenges are not inevitable. Smart fiscal policy means balancing revenues and expenses to ensure that vital public services are funded without unfairly burdening local taxpayers. It’s time to stop celebrating tax cuts that benefit the wealthy while raising costs for the rest of us. Instead, we should focus on policies that build a stronger, fairer future for all Granite Staters.

And remember, when your next tax bill comes due a lot higher than expected, don’t blame your city council. You know who to call.