New Hampshire benefits from the Trump’s tax reform. Just as the blind squirrel gets the acorn. The President pushed through Federal tax reform. That action resulted in lower tax rates on businesses. It also has the effect of encouraging investments in communities across each state. Yes, that includes New Hampshire.
Tax rates go down… Economic activity goes up
The expected after tax rate of return increases for projects when taxes go down. That has the effect of allowing previously marginally profitable projects to move forward. More projects are undertaken because there is more reward for taking the risk.
Opportunities are generated for both entrepreneurs and prospective employees. One person does not make all the good things happen. But one person can sure be the reason so many more have greater opportunity.
Economic activity goes up… workers get more jobs, more pay,
As prosperity from improved economic activity spreads, workers enjoy: more jobs, pay increases as productivity increases and demand for workers’ labor. These things translate into a higher standard of living and can means opportunity to pay down debt if workers have discipline.
The result of improved economic activity in the state is the extent residents rely on state social services goes down. With these savings, states have the freedom to decide what to do with the windfall. They can increase services for the remaining needy, address capital project needs, redirect the savings towards other essential services, or return the savings along to taxpayers.
New Hampshire got freedom of choice
Freedom of choice is given back to the states. That is exactly what happened with the administration’s tax cut. Enhanced economic growth thanks to the tax cuts expands tax bases. An expanding base generates additional state tax revenue. Better still it accomplishes this without a corresponding increase in the tax burden.
States can use this revenue boost to reduce tax rates without fear of cutting state services. That is exactly what happened under the Republican administration. Prior to tax reform, politicians were able to mask the true cost of their taxing decision. That was possible because taxpayers could deduct their state and local taxes (SALT) from the amount of personal income subject to federal taxation.
Close to 40 cents of each $1 increase in a state’s imposed tax burden could be shifted onto the federal government. This system provides incentive to state and local politicians to increase taxes. This harms both the state taxpayer as well as taxpayers across the nation forced to subsidize nearly 40% of the tax hike. Limiting the SALT deduction to $10,000 greatly mitigates this problem. New Hampshire does not have to share the tax burdens other states impose. New Hampshire benefits from Trump’s tax reform. Now the Dems want to throw it all away.