Don’t we all dream of a system of fair and balanced taxation? But what the heck does that mean? Let’s see if we can work through the question to a solution.
The proper function of taxation is to raise money for core functions of government.
We should not use taxes to direct the behavior of citizens. Taxes should not increase to close budget gaps. Those gaps which arise reflect overspending. This is true regardless of whether government is big or small. This is true for lawmakers at all levels of government.
Taxation will always impose some level of burden on an economy’s performance. We can minimize that harm. To do so policymakers must resist the temptation. They should not use the tax code for social engineering, class warfare and extraneous purposes. A principled tax system is an ideal way for advancing a state’s economic interests. Most importantly it is a way of promoting prosperity for its residents.
The goal of New Hampshire’s tax policy should be to raise revenue for functions of government. It should do so in a way that minimizes distortions. It should grow the overall economy and facilitate commerce. These are the functions of good tax policy, for fair and balanced taxation.