New Hampshire State Senator Jeanne Dietsch may represent a Republican-leaning district with conservative towns like Bedford and New Boston, but she’s not letting that stop her from pushing a progressive plan for a New Hampshire income tax. And she doesn’t think her red-district constituents will mind paying it, either.
“I think most of them would be happy to pay it,” Sen. Dietsch told NHJournal.
Sen. Dietsch’s plan is to extend the 6.5 percent Social Security tax rate beyond the federal cap, which is currently $132,900. A state income tax on those earnings, which she calls “closing the loophole,” would generate an estimated $313 million a year. As for objections to an income tax undermining the “New Hampshire Advantage,” Dietsch scoffs at the notion.
“We have an income tax—interest and dividend tax. I pay it every year. My plan is a tax on wages. Right now, 94 out of 100 people in New Hampshire pay this rate on all of their income already. The other six only pay on part of their income. I’m just asking them to do what everyone else does.”
In an interview with New Hampshire Business Review, Dietsch said her goal is to reduce property taxes, and she dismissed concerns that the 6 percent might object to picking up the $300 million a year tab. She says these New Hampshire taxpayers are so affluent they won’t notice the tax hike. “When you are making that much money you don’t pay attention to every penny. This is almost a painless way to raise revenue,” she told NHBR.
When asked by NHJournal if she stood by that statement, Dietsch said yes, adding, “Of course, that’s just my opinion.”
Not surprisingly, the NHGOP wasted no time attacking Dietsch’s proposal.
“The Democrats’ constant attempts to impose an income tax on New Hampshire citizens shows they are unwilling to listen to the voices of our constituents,” said Governor Chris Sununu in response to the Dietsch plan. “New Hampshire does not need nor will we ever support an income tax. I will fight it at every turn.”
GOP state Senate leader Chuck Morse called it “an income tax plain and simple. And it would give New Hampshire a higher income tax rate higher than Massachusetts.”
Dietsch’s fundamental argument is that New Hampshire needs more revenue and a more equitable way to collect it than property taxes. “There’s a lot of disparity between towns,” she told NHJournal. “I can afford to pay any property tax they throw at me, but in 13 of the 14 towns I represent, property taxes are the number one issue.”
Republicans like Morse respond that revenues are already up and spending on schools has been steadily rising. According to the Department of Administrative Services report for April, “Year-to-date unrestricted revenue totaled $2,306.2 million, which was above plan by $198.8 million (9.4%) and above prior year by $121.1 million (5.5%).”
Meanwhile, average per pupil spending in New Hampshire has risen from $12,775 in 2011 to around $16,000 today–an increase of almost 25 percent.
So how much more money–for a state school district estimated to have a third fewer elementary school students in a decade–is enough?
“I don’t think that’s the right way to look at it,” Dietsch said.