The Lens: A Guide for NH Tax Policy

Granite State Fair Tax Coalition

The State of New Hampshire continues to confront a known and quantifiable shortfall between revenue and funding essential public services. This structural deficit forces towns and the state to generate more than 60% of their revenue through the property tax. Property ownership no longer indicates true wealth nor income and certainly not an ability to pay. Although the property tax is simple to administer and enforce, the excessive reliance on an inadequate and unfairly levied tax results in a lack of public services and an unfair burden to property owners.

 
The Granite State Fair Tax Coalition maintains that the current revenue system for New Hampshire is unfair, unjust, and inadequate. This quickly becomes apparent when the system is exposed to public debate. We seek to sponsor and encourage such debate.
 
To facilitate the public discussion of tax policy in New Hampshire, the Granite State Fair Tax Coalition has developed a series of questions that should be considered for any tax policy, current or proposed. "The Lens" focuses attention on documented and well researched principles of just and equitable tax policy.
 
New Hampshire must adopt a tax structure that:
  • Accounts for an individual's or business' ability to pay. 
  • Demonstrates adequate capacity to lower property taxes for taxpayers of low or moderate means.
  • Diversifies and balances New Hampshire's revenue portfolio, which is currently over-reliant on the property tax. 
  • Expands the tax base, so that public revenue growth keeps pace with growth in the state’s population, economy and the need for essential public services. 
  • Offers simple administration and accountability.


The Lens
 
1.  Equity and fairness
  • Who primarily pays this tax?
  • Is the tax related to an individual's or a business’ ability to pay?
  • Do taxpayers in similar circumstances pay similar tax amounts?
  • Are exemptions in place to mitigate the impact on those least able to afford the tax?
  • What protects the taxpayer from arbitrary increases?
  • Do individuals and businesses with higher incomes pay their fair share?
  • Are low- and moderate-income families fairly levied? 
2.  Sufficiency and Stabilility
  • Is the tax supposed to fund a specific service, program or infrastructure project? If so, will revenue from this source keep pace with anticipated growth in service delivery?
  • Is the revenue from this tax predictable enough to allow planned and responsible budgeting?
  • Does the tax fund public needs of our citizens including education, public safety and health and human services? 
3.  Economic Vitality and Harmony
  • Does the tax place businesses at a competitive disadvantage compared to other states?
  • Does the tax generate revenue from robust areas of the economy that are growing and decrease dependence on declining areas?
  • Are adverse impacts of the tax policy easily identifiable? 
4.  Economic Neutrality and Efficiency
  • Does the tax encourage businesses or consumers to make decisions based upon economic advantages, rather than simply on tax savings?
  • Do businesses and individuals from other states pay their fair share of state-funded services and infrastructure?
  • Is there a Federal offset to this tax, cutting the effective rate paid by individual taxpayers and corporations?
  • Does this tax bring revenue to the state that is now going to other states?
5.  Simplicity, Transparency and Accountability
  • Is it clear to taxpayers how much they pay?
  • Is it easy for taxpayers to understand the rules and comply?
  • Are there excessive loopholes and exceptions, and who benefits from them?
  • Are the costs of collection and compliance monitoring low relative to revenue generation?

You can download a PDF of this document in our Fact Sheets section here.