{"id":9637,"date":"2024-04-15T18:47:44","date_gmt":"2024-04-15T22:47:44","guid":{"rendered":"https:\/\/granitestatetaxpayers.org\/gst\/?p=9637"},"modified":"2024-04-15T18:49:19","modified_gmt":"2024-04-15T22:49:19","slug":"if-you-live-in-massachusetts-new-york-or-california-every-day-is-tax-day","status":"publish","type":"post","link":"https:\/\/granitestatetaxpayers.org\/gst\/if-you-live-in-massachusetts-new-york-or-california-every-day-is-tax-day\/","title":{"rendered":"In Massachusetts, New York and California, Every Day is Tax Day"},"content":{"rendered":"

If You Live in Massachusetts (Or New York or California), Every Day is Tax Day!<\/strong>
\nPosted to Politics<\/a> April 14, 2024 by Andrew Cline of Josiah Bartlett Center. Re-posted with permission.<\/p>\n

Since 2021, half of U.S. states have cut personal income taxes. Only three states\u2014Massachusetts, New York, and California\u2014raised them. Guess how those three states are doing now?<\/p>\n

All are shedding population and tax revenue.<\/p>\n

In Massachusetts<\/strong>, state revenues fell for seven straight months through February<\/a>. In January, Gov. Maura Healey announced $375 million in budget cuts<\/a> to begin covering a projected $1 billion revenue shortfall. And don\u2019t forget the historic population decline<\/a> as residents flee to lower-cost states.<\/p>\n

In New York<\/strong>, Gov. Kathy Hochul\u2019s proposed budget fills a $4.3 billion deficit even as it projects deficits of $9.9 billion<\/a> over the next four years. She proposes a $6 billion, 4.5 percent spending increase<\/a>, and still projects future deficits. Last year, New York lost 112,000 residents.<\/p>\n

California<\/strong> is even worse off. Facing a stunning $73 billion budget deficit, lawmakers last week voted to trim spending by $17 million<\/a>, just for a start. California lost 75,000 residents last year after losing about half a million from April 2020 to July 2022<\/a>.<\/p>\n

Yet advocates of an aggressive and lavishly funded welfare state regularly hold up those states as ideals of good governance.<\/p>\n

New Hampshire, we\u2019re regularly told, is falling behind more enlightened states like Massachusetts, New York, and California because our taxes and spending are far too low.<\/p>\n

The opposite is true, though.<\/strong>
\nNew Hampshire\u2019s economy and people are thriving precisely because of our low-tax, low-spending culture that values self-reliance and personal responsibility over government dependency.<\/p>\n

For starters, New Hampshire\u2019s tax revenue this fiscal year is up, not down. State revenue through March is up $130 million over the same period during the last fiscal year<\/a>.<\/p>\n

Business tax revenues are down by $27 million compared to the same period last year. But that\u2019s not because of business tax cuts, as some have suggested. (Business tax revenues have surged<\/a> throughout the years of state business tax cuts.)<\/p>\n

Businesses have to pay taxes quarterly, and those payments are based on what they estimate they\u2019ll owe by the end of the year. If a business winds up overpaying, it used to be able to claim the entire overpayment as a credit toward the next year\u2019s tax bill. Starting in 2023, legislators capped overpayment credits at 500 percent of the year\u2019s tax bill. Anything over that would have to be refunded to the business.<\/p>\n

Those over-payment refunds account for 46.4 percent of all business tax refunds so far this fiscal year, or $60.3 million. That\u2019s more than double the $27 million by which business tax revenues have fallen below the previous year.<\/p>\n

So it\u2019s likely that the forced refunds are the cause of this year\u2019s drop in business tax revenues. Those revenues are $27 million below the prior year but only $5.6 million below this year\u2019s budget. Legislators clearly anticipated a drop in business tax revenue caused by the forced rebates.<\/p>\n

New Hampshire\u2019s revenues are very stable compared to New York\u2019s, Massachusetts\u2019, and California\u2019s.<\/strong>
\nThat\u2019s by design. Instead of relying heavily on personal income taxes and consumption taxes, New Hampshire relies on tax collections from business, property, insurance, real estate transactions, and alcohol and tobacco.<\/p>\n

Our tax structure keeps spending relatively constrained and forces state government to operate more efficiently, which is why the state ranks as No. 1 in the nation for taxpayer return on investment (ROI)<\/a> and has for years, in WalletHub\u2019s annual survey. The site also ranks New Hampshire sixth in overall government services.<\/p>\n

For government services, effectiveness, and value\u2014not total spending\u2014are the metrics that ought to matter. Keeping taxes low forces the state to do more with less.<\/p>\n

Progressives don\u2019t understand that the better measure of success for a government program is not how much it spends, but how well it spends. New Hampshire spends its money very well, at least relative to other states, because it has to get more out of every taxpayer dollar.<\/p>\n

This doesn\u2019t mean that New Hampshire doesn\u2019t spend. Revenues for the current two-year state budget were projected to be $868.7 million, higher than the previous state budget. That fueled record state spending. The 2024-25 budget is 16 percent bigger than the 2023-24 budget. New Hampshire lawmakers definitely know how to spend when they have money sitting around.<\/p>\n

The difference between New Hampshire and the profligate states of Massachusetts, New York, and California is that New Hampshire lawmakers lack the revenue-raising tools their counterparts in those big-spending states have. Without an income tax, New Hampshire legislators can\u2019t simply \u201craise taxes on the rich\u201d whenever they want to spend more money. Without a sales tax, they can\u2019t raise hundreds of millions of additional dollars by nudging the consumption tax rate up a bit (for the children, of course).<\/p>\n

All four states in this discussion are required by their constitutions to have balanced budgets.<\/strong>
\nBut only New Hampshire regularly avoids the drama of huge spending binges followed by huge budget cuts because only New Hampshire has a tax system designed to minimize government revenue and maximize economic growth.<\/p>\n

In contrast with many other states, New Hampshire\u2019s tax structure is well-suited to promote economic growth. It incorporates many features recommended by the Organization for Economic Cooperation and Development (OECD) for generating economic growth<\/a>, including low corporate and personal income taxes.<\/p>\n

Though progressives say otherwise, tax increases do reduce GDP<\/a>.<\/p>\n

Former Gov. Mel Thomson\u2019s famous saying that low taxes are the result of low spending is true, generally speaking. But it\u2019s also true that keeping taxes low discourages overspending. New Hampshire does this pretty well.<\/p>\n

One question to ask yourself on Tax Day is whether you\u2019d rather live in a state that overtaxes you to build a lavish welfare state and wastes billions of dollars in the process or whether you\u2019d rather live in a state that taxes you less but wastes relatively little and provides high-quality government services in exchange for what it takes.<\/p>\n

That ought to be an easy answer.<\/strong><\/p>\n

By Andrew Cline
\nAndrew Cline is president of the Josiah Bartlett Center for Public Policy<\/a> and host of the WFEA Morning Update<\/a> on 99.9FM and 1370AM. He wrote this for NHJournal.com.<\/p>\n

Click here to link to the article at NHJournal.<\/a><\/p>\n

Posted by GST Chairman Ray Chadwick<\/p>\n","protected":false},"excerpt":{"rendered":"

If You Live in Massachusetts (Or New York or California), Every Day is Tax Day! Posted to Politics April 14, 2024 by Andrew Cline of Josiah Bartlett Center. Re-posted with permission. Since 2021, half of U.S. states have cut personal income taxes. Only three states\u2014Massachusetts, New York, and California\u2014raised them. 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