Mark Fernald Needs New Material for His Income Tax Arguments - Granite Grok

Mark Fernald Needs New Material for His Income Tax Arguments

Mark Fernald Wants an Income taxMark Fernald wants New Hampshire to have an income tax before he dies.  It appears to be one of his deepest desires.  So desperate is this need that he is willing to reuse debunked rhetoric to ensure he is not prohibited from having the chance to get one.

Yesterday, over at Windham Patch, Fernald had the income tax equivalent of a recurring rash as “Fair Share class warfare” sores rose up from the page in his opposition to CACR 13.  CACR 13 is a Sttate constitutional amendment that would ban New Hampshire from taxing personal income.  But such a prohibition for Mr. Fernald would be akin to the death of the Grateful Dead’s Jerry Garcia to Dead Heads.  “Well now what do we do with all our free time.”  So Mr. Fernald has gone on the offensive (as in, to offend).

We have a tax system that is made by and for the top 1 percent. The households in New Hampshire with the highest incomes – the 1 percent with incomes $480,000 and up – on average pay just over 2 percent of their incomes in state and local tax. The folks in the middle, on average, pay about 6 percent. The lowest income people have the highest tax burden. They pay, on average, over 8 percent of their income in state and local tax.

I’ve been over this deception more than once, but I am more than happy to revisit it every time Mark wants to bring it up–which will be often between now and Noveber.

There are several things wrong with Fernald’s assumptions, not the least of which is that New Hampshire’s reliance on property taxes has managed to make it a state with one of the lowest overall tax burdens, year after year.   If tax burden were his true concern you’d expect that to come up but it never does.  (Hint: he is not interested in your tax burden, he is interested in revenue streams most likely to create the expansion of government.)

But of all the things wrong with Mark’s meme, I find this the most interesting.  In his world of ‘fair’ the cost of things, a nice bowl of fruit, a widget, any product or service, even state government, must be measured in percents not actual dollars, because fair is not a level concept of access, cost, or opportunity, it is an arbitrary political notion managed by experts in the government and subject to their capricious whims–based solely on their obsession with  financing the expansion of the administrative state; an expansion method which, by the way, is far more likely to advantage the rich and encumber the poor.  Another problem Mr. Fernald will not waste breath on.)

So what about that 2% and 8% gibberish?  Back in March of 2011 it looked like this.

Using Fernald’s figures on percentages a person making $20,000.00 would be paying 8.3% of their income in taxes.  So the annual cost for their NH state salad bar plate is $1,660.00 per year.  Without even considering tax credits, rebates and so on for any income group, here’s the breakdown based on Fernald’s misleading percentages from the top of each of his income brackets, in terms of actual dollars.

$20K/year           $1660.00

$34K/year           $2244.00

$55K/Year           $3190.00

$159K/Year         $5565.00

$474K/year         $9480.00 ($9600,00 in the new 448K and up reference)

And just for fun…

1.6million/year  $32,000.00

This does not take into account that there are probably 150,000 small business owners in New Hampshire who comprise a moderate to large portion of the upper income brackets whom Mr. Fernald believes are screwing the rest of us.  The  people whose commerce pays the majortiy of all state taxes from taxes on business property, utilities, communications, the BET and BPT, and some 35 other taxes or fees that pay for the cost of the state government that, coincidentally, lower income persons use more heavily.   So if anyone is paying an unfair share of taxes in New Hampshire, it is more likely higher income persons and more specifically those who own and run business in the Granite State.   (This is probably why Fernald sticks to percentages because it can’t be made using real tax dollars paid.)

Mr. Fernald’s got other problems as well. The original source for his percentages included additional data he could not use because it deals a mortal blow to his class war rhetoric. (Referring back to my March 2011 post again.)

Did you know that while people in New Hampshire pay 60% more in property taxes than the national US average, we also pay 65% less than the national average for sales and excise taxes, and 92% less than the national average for income taxes.  (Figures provided by the Institute of Taxation and Economic Policy–a group started by a rich liberal with some connections to American Progress and the same source Fernald used to get his percentages argument–but then forgot this other stuff for some reason.).

You know who gets hit hardest by sales taxes, excise taxes and income taxes?  Lower income people.  Know why?  Because those taxes and fees represent a significantly higher percentage of their annual income.  Right Mark?  A $2.00 widget is a larger percentage of income from someone who earns $20K compared to a millionaire.  Same for milk, golf lessons, Frisbees, happy meals and everything else, which is why Fernald’s argument is so stupid.

Unless Mark is willing to make a case that the entire system of commerce, even in a fixed economy, is grossly unfair by his measure, then he has no argument at all.  Remember, that 2.00 widget is 0.01% of a lower income persons wages but only 0.0004% of the rich bastards income.  Even if Mark used the polcie state to fix the price he could not eliminate that disparity.  This is why we must talk dollars.  The folks making $484K are paying at least $9500.00 dollars for the same thing someone else gets for around $1500.00, with the person paying $1500.00 having significantly more access to the supposed benefits Fernald believes government exists to provide.  This is Mark Fernald’s Fair Share argument and it has no legs to stand on.

More problems?  Why yes.

The first thing they did when they had complete control of state government was to spend.  They passed the first budget over 10 billion, and then the first one over 11 billion.  So what?  Property taxes are overwhelmingly used to pay for local taxes, and local spending.   The Democrat controlled state government not only raised more taxes and fees to fund their spending binge, they went after local shares of rooms and meals taxes, crammed higher registration fees onto local municipalities, and abandoned the states portion of pension costs to local taxpayers in an effort to cover their irresponsible spending.   An income tax would go straight to Concord where the kind of people who want badly have a miserable record when it comes to managing money.

This is why there is no evidence whatsoever that an income tax will limit or eliminate the burden of property taxes.  Everywhere the argument has been made,  relief –if any–vanishes in just a few short years as property taxes inevitably go back up.

So what Mr. Fernald is really supporting is the expansion of state government.  Now I am certain that if we could get him to admit to any of this that he would still fall back on the idea that such expansion of the state would actually benefit lower income people, but there is no evidence of this either.   The very scheme Mr. Fernald claims is unfair–which we have in fact demonstrated is not–has consistently made New Hampshire a state with the lowest poverty rate, highest average annual wage, safest place to live, with one of the highest qualities of life, and a below average unemployment rate.  Please show me the states with income tax schemes that fair better than New Hampshire?

No such place exists except in the fantasy world of the progressive-Democrat mind where the government always makes better decisions about how to spend your money, and always spends more than any sane person ever would.   What Mr. Fernald wants is to create a new expensive tax collecting bureaucracy–complete with union-dues-paying-Democrat-candidate-supporting-state-employees with more pensions and benefits paid for by tax payers–who can use the the police power of the state to separate you from your income…to grow an even larger and intrusive state government.

And one final problem every Democrat must ignore is price pressure.  Any new broad based tax will put price pressure on everything.  Income taxes affect the cost of labor.  The cost of labor affects the cost of products and services.  This inevitably drives up the cost of everything for everyone, a cost which always weighs more heavily on lower income folks.  Yes, Mr. Fernald’s obsessive desire for an income tax is a regressive tax that will ultimately harm the less fortunate more than any other income group; a problem created by Mr. Fernald which he would then happily offer to “fix” with yet another expensive bureaucracy–paid for by a slight increase in that income tax he wants. Rinse. lather. Repeat.

CACR 13 protects low income workers from being nickle and dimed to death for the pleasure of big government liberals like Mark Fernald.  It ensures that the people who earn the most, and most likely to own more expensive property and more of it, do shoulder more of the burden of taxation.  And it keeps the cost of government in front of everyone, when the tax bills shows up in their mailbox–inciting acts of public interest from even the most disinterested taxpayer, with demands for transparency in government from persons of every political stripe, that are by their very nature inducements to lower overall taxation and all the great things that make New Hampshire a better place to live and work.

It is this ritual of lump sum method of taxation of property owners that has consistently made New Hampshire a state with the lowest poverty rate, highest average annual wage, safest place to live, with one of the highest qualities of life, and a below average unemployment rate.

The ability to enact an income tax will not secure nor protect any of those benefits,  it will only allow a revenue hungry intrusive government to grow in ways that make those unique benefits unsustainable.  And like all taxes it will find its way into your paycheck–the people who want to spend it so badly have guaranteed this will have to happen.  Protect yourself from the expansion of intrusive state government for its own sake.  I don’t care who you are, you know don’t want your income taxed.  Just admit it.  This November vote in favor of CACR 13.