Voters to consider tax amendment

by MICHAEL RIORDAN | 11/5/12 11:00pm

While New Hampshire does not currently have an income tax, the state's voters known for their anti-tax tendencies will have the opportunity to vote on CACR 13 today. The measure is a constitutional amendment proposed by the state legislature that would prevent it from being able "to impose and levy any assessment, rate or tax upon income."

In order to be placed on the ballot, over 60 percent of both houses of the state legislature had to pass the measure, State Rep. Bernie Benn, D-Grafton, said. In order for it to pass into law, two-thirds of voters must approve of the measure.

Benn, who voted against the measure, urged voters to reject the amendment because it will limit the legislature's options for collecting revenue.

"It will tie the hands of the legislature," Benn said. "We don't have an income tax, but we do have an interest and dividends tax. If this ever did pass, we don't know if that tax would be considered unconstitutional."

The legislature has consistently voted down bills that would enact an income tax, so voters should not feel the need to amend the constitution, Benn said.

State Rep. William Infantine, R-Hillsborough, argued that voters should approve the amendment because the tax disproportionately affects lower-income voters. Because New Hampshire's constitution requires all taxes to be levied equally, an income tax would burden those who have little to no discretionary income, Infantine said.

"When incomes are good and money is flowing, government spends," Infantine said in an email to The Dartmouth. "When incomes are low and the money flows, government rarely cuts costs, leading to higher income taxes to make up for the loss."

Instead of simply banning an income tax, the "badly drafted" amendment may cause fights over the definition of "income," according to government professor Linda Fowler.

"Does that mean the legislature can tax wealth?" Fowler said. "It may even raise questions of the practice of raising revenues through business fees."

Voters must also consider the ramifications of amending the state's constitution, Fowler said. Voter-approved constitutional amendments tend to produce unintended consequences and long-term legal disputes, she said.

If the state cuts revenue sources, expenses would be shifted to local communities that may raise revenue through property taxes, which remain among the highest in the nation, according to Benn.

"One unintended consequence would be if the state was strapped for revenue," Fowler said. "They may raise property taxes, which are already extremely high in the state and would have a pernicious effect on rural voters and people who have owned their land for a long time."

Voters also may incorrectly assume that amending the constitution would shrink the government's role in people's lives, Fowler said.

"What you end up doing is shifting the tax burden to more regressive or problematic sources of revenue," she said.

New Hampshire voters have historically opposed any form of income tax and have been more willing to pay property taxes, Infantine said.

"The property tax might not be the best way to tax, but I believe it is more stable and less susceptible to the ebbs and flows of personal income," he said.

The amendment has been a "stealth" measure, according to Fowler. Proponents have shied away from detailed debate, instead preferring to appeal to voters' natural anti-tax sentiments, she said.

"It may be symbolically appealing in an anti-tax state like New Hampshire," Fowler said.

Several gubernatorial candidates who have run on the platform of introducing an income tax have performed poorly in state primaries and general elections, according to Benn.

Benn said he does not know how the public will vote on the measure given that some voters will not realize that the amendment is included on the ballot.

"We're working hard to explain why [the amendment] is a bad thing," Benn said. "These things are unpredictable."

While Infantine expects the majority of voters to approve of the measure, he predicts it will fail to reach the two-thirds requirement by a small margin.

The College Republicans declined to comment for this article because the group does not formally take policy positions, according to College Republicans President J.P. Harrington '14. The College Democrats have not taken a stance on the amendment, according to College Democrats President Mason Cole '13.