NH HB 628: One Step Closer to the Perpetual Drain of an Income Tax

by Steve MacDonald

taxBy Emmett Harris

The Family and Medical Leave Insurance Act, HB 628, isn’t taking any time off. Instead, the bill is working its way steadily through the New Hampshire House, full of the promise, pleading, and puffery common to many progressive proposals. Let’s hope its journey ends short of becoming law.

First among the bill’s failings is the unequal footing given to the choice of FMLI participation. The opt-in process requires employees to do absolutely nothing. By following this onerous procedure, employees will find themselves entered into the program. Those wishing to opt out must download a form, have it notarized, and submit copies to both the department and the employer. The scheme deters employees from making the “wrong” choice, but that isn’t the end of the procedural imbalance. The aforementioned process applies when employment begins. Employees who jumped through the opt-out hoops initially can still opt-in each January. As for those wishing to opt out … well, they had their chance.

An even bigger concern is the bill’s creation of an income tax pipeline in New Hampshire. Employers will have to withhold 0.5 percent of wages per employee for each week of the preceding quarter. The monies withheld presumably are limited to the premiums from those shuffled into the program. Like all do-good legislation, the language gets a bit vague. It’s unclear whether employers must withhold based on the total number of employees or just the ones who didn’t opt out. Either way, the process, and conditioning will bring our state one step closer to the perpetual drain of an income tax.

Lastly, the analysis accompanying the bill forecasts a cost to taxpayers of around $4 million within four years of passage. That’s the low end, and it’s based solely on new positions needed by the department. All other operating expenses are listed as “unknown.” That’s worrisome.

HB 628 is a bad bill. Its enrollment process is skewed, its collection process is a waystation on the road to an income tax, and it’s likely to put an upward strain on future budgets. HB 628 is full of false and empty promises. It’s a specter in need of a quick and decisive exorcism. Everyone should urge their representatives to vote against it.

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