Fair Tax hits Town Meetings

My town, Webster just rejected the anti-pledge article. I fail to see why there is such faith in the property tax system. At supposedly 100% valuation, there are some properties that are actually assessed at a higher value than could actually be realized in today's depressed housing market. Aren't we basing our tax system on dangerous variables? As to NH being "tax free" my yearly dividends and income payments to the state revenue department sure seem like taxes to me. David, Webster NH.

I got a call from a survey firm located in Plano Texas about two weeks ago. I didn't take the survey, but asked the pollster what it was about, and who was sponsoring it. The pollster was disconcerted, said it was about taxes, and how I should vote at town meeting. He referred to NH Advantage.

The last overhaul of the state's tax system was during Governor Peterson's
administration. I think it is time that the legislature revisited the whole system (or non-system) of taxation in New Hampshire and come up with a fair, progressive, tax system

Folks, what makes you think NH would be any different than the other New England states in fiscal discipline in adding an additional revenue source. This is so old it really gets annoying, take a look at a factual study on the affects of incorporating an income tax to help reduce property taxes in CT. I was there, lived it, saw the negative affects and moved here to get away from the corrupt system.... yankeeinstitute.com

Let me first say that I am not a spending bigot--saying that it must go down, down, down...

But it is disingenuous to not talk about spending when considering taxes. Let's face it, it is total spending that sets the required level of tax. Taxation methods are just a way of distributing that burden. For example, I say that the Bush administration has indeed raised taxes, not lowered them. We've just put it on a credit card that will come home to roost later.

And what strikes me are the arguments that we need to cut property taxes but improve spending in infrastructure like education. That doesn't wash. Taxation is mostly a zero-sum game, and I don't see how you could cut in the average but raise in the aggregate, not by a lot.

I have nothing against any particular taxation method--each has its purpose, and each can be done better or worse. I agree that property taxes are not very progressive--though they are in part as one tends to get higher value properties with income. But sales taxes are not very progressive either. And in terms of income taxes, I think the majority of the highest-income earners in the state work in Massachusetts--if that's the case, then we actually shift the tax burden from high income to low, as much of that high-income is inaccessible unless we have a rate higher than that of Mass.

And then we talk about "fair". It seems that "fair" tends to me to mean "let someone else pay." For example, let's consider education. If I recall, it costs $3-4K per student to educate them per year. So, take the number of kids you have in school, multiply by that, and compare to your property taxes. That is one measure of "fair".

But someone with 2, or 5, or no kids in school all pay the same. Is this "fair"? In fact, in an income-tax situation, the more kids you have, the *less* you would pay, as most systems have an exemption/deduction for dependents.

So, what is fair? I have two criteria I use:
* A person earning more should pay a higher percentage than someone earning less.
* A person using more services, given equal income, should pay more than someone not using them

Perhaps the latter is more controversial, but note these are two different scales. All I am saying is that even if you earn only $20K, you should pay more to have 5 kids in school than someone earning *the same $20K* and who has 2, or none.

In some sense, the property tax system is largely fair. If you live here, you pay, no matter where your income comes from. If you earn more, you buy higher-priced properties, so you pay more (though I'm not sure it really meets the percentage requirement). And if you have a larger family, you tend to have a larger house, and so pay more too.

And let me close by saying that there is no inherent reason why property taxes couldn't be progressive. For example, you could apply a $25K exemption to a residence. This would mean that a $100K house would pay actually 3 times more than a $50K house, instead of twice. Or, rates could be tiered. Perhaps it would take legislation to enable that, maybe even an amendment--I don't know. It could even be dependent on age (though remember, that shifts burden to the young too). But it could be done that way.