New Hampshire Governor Sununu Is Fighting Massachusetts Efforts To Raise Taxes on NH Citizens
By Americans for Tax Reform President Grover Norquist
His comments in the October 25, 2020 New Hampshire Union Leader are presented with permission.
TOO MANY POLITICIANS are using the pandemic as an opportunity to come up with new ways to steal money from taxpayers.
To these politicians, “smart” tax policy is any scheme that allows them to raise taxes on people who cannot vote them out of office. Their slogan might be “taxation without representation is safer for a politician’s career.”
Real leaders would reform their own states so that government is more efficient, but not everyone welcomes such hard work. As taxpayers continue moving away from poorly run states with high taxes and into more responsible states with lower taxes, corrupt or incompetent politicians will instead redouble their efforts to find ways to export their state’s tax burden.
Residents of New Hampshire are all too familiar with this growing trend.
New Hampshire is one of nine states that do not tax wage income, one of five states without a statewide sales tax, and is even one of a handful of states that prohibit local governments from collecting sales taxes. The absence of these taxes (commonly known as the New Hampshire Advantage) has made the Granite State an extremely attractive place to live, invest, and do business.
Indeed, the New Hampshire Advantage is the reason that many workers in the Boston area choose to live north of the Massachusetts-New Hampshire border. Households can keep more of their hard-earned income than if they lived in Massachusetts, which imposes a 5% income tax rate. Living in New Hampshire also allows them to avoid the Bay State’s 6.25% combined state and local sales tax rate.
But unfortunately for these workers, and all residents of New Hampshire and other low tax states, the Massachusetts Department of Revenue is embarking on a crusade to impose Massachusetts taxes across state lines.
For many years, Massachusetts has had an agreement in place with New Hampshire: New Hampshire residents who work in Massachusetts must pay Massachusetts income taxes for days spent physically working in the Bay State; income earned on days spent working from home in New Hampshire is NOT taxed by Massachusetts.
That was then.
Now, an emergency order from Gov. Charlie Baker’s (R-Mass.) administration has changed that deal, forcing New Hampshire commuters that are teleworking due to the coronavirus to pay Massachusetts income taxes through at least the end of the year.
The order states:
“(A)ll compensation received for services performed by a non-resident who, immediately prior to the Massachusetts COVID-19 state of emergency was an employee engaged in performing such services in Massachusetts, and who is performing services from a location outside Massachusetts due to a Pandemic-Related Circumstance will continue to be treated as Massachusetts source income subject to personal income tax under M.G.L. c. 62, § 5A and personal income tax withholding pursuant to M.G.L. c. 62B, § 2.”
Even if New Hampshire teleworkers do not step one foot into Massachusetts while the order is in place, the Massachusetts Department of Revenue says they still have to send over a chunk of their paycheck.
Fortunately for the people of New Hampshire, Gov. Chris Sununu (R) is committed to protecting them from Massachusetts’ aggressive tax collectors. Sununu has maintained strong opposition to this rule for months and, as he promised, New Hampshire has filed a lawsuit over it in the United States Supreme Court.
“New Hampshire has no choice but to seek relief in our nationâ€™s highest court,” said Sununu. “Massachusetts cannot balance its budget on the backs of our citizens and punish our workers for working from home to keep themselves, their families, and those around them safe. We are going to fight this unconstitutional attempt to tax our citizens every step of the way, and we are going to win.”
This is not just New Hampshire’s fight. For example, California Democrats are pushing a new wealth tax that would apply to someone who left California as long as 10 years ago. (Yes, this sounds like a bad joke from the song “Hotel California”, where you can check out any time you’d like but you can never leave.)
Poorly governed cities and states realize they are driving their most successful citizens and taxpayers away.
These states will, for some time, refuse to self-correct, and like East Germany insist that their fleeing citizens should be kept under their control somehow. But the wall fell. The failed state of East Germany could not continue.
Eventually competent and honest government will defeat and outlast incompetence and corruption.
After all, we are Americans.
Grover Norquist is president of Americans for Tax Reform, a group founded at the request of President Ronald Reagan in 1985. He lives in Washington, D.C.
Posted by GST Chairman Ray Chadwick