Fernald tax plan ruins NH advantage

“Ax The Property Tax” and Replace it With What?

by Steve MacDonald

Mark Fernald is a Democrat in New Hampshire. He is running for the New Hampshire State Senate. His campaign signs say “Ax the Property Tax.” If that sounds too good to be true it is because it is. But even if we believe him, which we should not, all you need do to debunk this act of fraud is to look at either Vermont or Maine.

Our neighbor states have the very taxes Mr. Fernald would have to impose were he to get his way and neither of those states are as well of as New Hampshire economically.

Art Woolf, writing in the Burlington Free Press, recently explored how Vermont’s embrace of a sales tax has been a decade’s long boon for the New Hampshire economy and curse for the Green Mountain State.

Retail sales and employment grew on the New Hampshire side of the river and virtually stagnated on the Vermont side. In 1972, just a few years after Vermont’s sales tax started, and less than a decade after I-91 was completed, retail sales in the Vermont counties bordering the Connecticut River amounted to $13,800 per person.
In the New Hampshire border counties, spending was a nearly identical $14,400. Twenty years later, Vermont’s per capita sales had decreased to $12,000 while per capita sales in the New Hampshire border counties increased to nearly $17,000, forty percent more than in Vermont.

Despite having a major highway, I-91, running down the Vermont side of their shared border, all the economic activity is in New Hampshire. Why? Vermont’s embrace of broad-based tax schemes.

In 2012 on the New Hampshire side of the border, per capita retail sales were 50 percent higher than in 1972, 80 percent higher than in 1967, and 60 percent more than on the Vermont side of the river.

Meanwhile, when we look at the view from Maine,

With no sales tax and no income tax, New Hampshire residents get to keep more of their own money; with the median income level at $70,936 a year — a full $20,000 more per year than Mainers — that’s a lot of money to use even if New Hampshire property taxes are higher than Maine’s.”

The success of the New Hampshire tax formula is not limited to the Granite State.

“The New Hampshire data reflects a national trend: States that don’t assess income taxes or sales taxes have more robust economies than the states that do. Citizens want local control of taxes. When states leverage high income and sales taxes for pet programs, citizens have little say in where and how the money is spent. While property taxes are the bane of many, and can be misused, property taxes are the most controllable of any taxes levied — because these are the taxes that are approved at the municipal level, not at the statehouse. 

When Mark Fernald says he wants to ‘ax the property tax‘ his mission is to bring New Hampshire down. If he denies it the best we can hope for is that he’s just another economically challenged leftist pimping the narrative. But I fancy him as much more clever.

Like most Democrats for Fernald, the single biggest limit placed upon the endless expansion of government for which he pines is revenue. The state can’t spend what it has not pilfered. So how do we collect more revenue? If it were property taxes Fernald would be singing their praises but he’s not.

Property taxes are a very visible sign of how much your government takes from your pocket.

Property taxes are collected locally not at the state level. In fact, aside from a statewide education tax, there’s no Property tax for in New Hampshire for Fernald to ax in Concord. Which is great news because Fernald has no intention of extracting that tendril. No Democrats want that. They want bigger tentacles in more places. Their goal is more government in every part of your life. To do that they need more money, thus the scheme advertised so dishonestly on Mr. Fernald’s signs.

The goal is more top-down rule and more fiscal control of local issues from Concord. That means less local control.

Benevolent legislators and the throngs of lobbyists and special interests who would come knocking on Concord’s door for a piece of that action.

Before you knew it, not only would you have lost control of local spending, you’ll have lost your state legislator to the Concord equivalent of the DC beltway.

More taxes means more influence peddling and not by you. You don’t have the time or the money to hire a lobbyist to go fight for your money. You also won’t have the resources to donate to candidates running for office who decide where that money goes.

That’s without even considering the complete evaporation of the New Hampshire Advantage that Fernald’s deception would cause. The loss of retail jobs, border tax boom towns, the retail-tourists, and all the revenue they bring.

If Mark Fernald has his way in short order there’d be no reason for businesses to stay in New Hampshire. They might just as well move across the border to Vermont, Maine, or even Massachusetts to be closer to customers who used to want to come here instead.

In a matter of years, we should expect a lower overall standard of living not for all people in the Granite State but primarily the folks who benefit most from the kinds of jobs we’d lose. A group that Democrats would identify as the working poor. Add to that lower income folk who would lose access to entry-level jobs and job training they could take with them to better-paying positions. Opportunities crushed, not by greedy business owners but by greedy politicians like Mark Fernald.

That means more folks on food stamps or welfare or maybe they just cross the border to follow their job. And that means raising the taxes just like the did in Vermont, making New Hampshire less appealing to not just business owners but human beings in general.

Art Woolf closes his Burlington Free Press piece with this.

I’m sure that in 1969 neither Governor Deane Davis nor any legislator who supported Vermont’s sales tax anticipated negative outcomes for the Vermont towns and cities along the Connecticut River. The history of Vermont’s sales tax serves as a cautionary note about the unintended, but not unforeseeable, consequences of taxes.

In 2018, even though we do know the negative impact these tax changes have (and the advantage they give to New Hampshire by not embracing them), we still find ourselves plagued by dim-witted political mountebanks selling their own dreams for bigger government as some secret cure-all.

It’s a scam.

So, if you are thinking about axing anything this November make sure it is Mark Fernald’s latest political ambitions and just about anyone else with a (D) next to their name. They all want the same thing but they aren’t all willing to just come out and admit it.

 

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