Another View -- Paul Henle: A tax shift would improve New Hampshire's economy
By PAUL HENLE
It is time for balanced tax reform in New Hampshire, which will stimulate our economy and help create jobs. Tax reform that will help people stay in their homes. The New Hampshire Tax Shift Plan is that reform.
New Hampshire has ceased to be a friendly place for businesses, and our tax system is a big reason why. Not only do businesses pay high taxes on their profits, but also on their payroll — whether they make money or not. And on top of that — high property taxes.
We can and should do something about that.
The New Hampshire Tax Shift Plan will come before the Legislature this session and its passage would benefit the state, its businesses, and its property tax payers.
The plan would repeal the puzzling Business Enterprise Tax (BET,) a job killer if there ever was one. The BET taxes you on the number of workers you have. The more workers, the more tax you pay. It is an impediment to startups and needs to go. It has tripled since it was enacted.
The plan would slash the rate of the Business Profits Tax (BPT) from 8.2 percent to 4 percent. This is just the message we need to send to the world that New Hampshire is once again a business-friendly place to be. As Charlie Arlinghaus wrote in this paper “Lowering the business profits tax is the most visible and effective signal that this state (or any other) can send to the economic development world.”
The plan would repeal the Statewide Property Tax. This would reduce everybody’s property tax rate by $2.30/thousand. A person owning a house assessed at $200,000 would see a reduction of $460 in their property tax.
The Statewide Property Tax is the tax that was created in response to the Claremont education funding lawsuit. It is the tax that gave us donor towns. Unlike the local property tax, voters have no say in how high this tax goes. It has been a problem ever since the day it was enacted. Nobody will miss it.
The plan also repeals the Utility Property Tax. This is a hidden tax on ratepayers. $40 million a year is collected from utilities that just pass the cost on to ratepayers through their utility bills.
This lost revenue is replaced through a 3.95 percent income tax.
It would be a simple flat tax based on the federal Adjusted Gross Income with deductions and exemptions equal to or greater than the federal ones. Its passage would not spell doom for our economy. Most states have one, and we all pay it at the federal level.
The New Hampshire Tax Shift Plan gets rid of three taxes and reduces another one. These are all taxes that most people know nothing about and yet in one way or another we all pay them.
The New Hampshire Tax Shift Plan replaces them with the most visible and transparent tax of all, which everyone will know and understand and which every voter will make sure stays as low as possible.
Rep. Paul Henle, D-Concord, serves on the House Ways and Means Committee.