Limited Taxation
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CLT Update
Friday, March 5, 1999


It looks like hell is freezing over -- the New Hampshire House of Representatives yesterday voted to impose the first income tax in that state's long history of independence. It didn't take long, once Democrats to our north took control of the "Live Free or Die" state Senate, increased their numbers in the House and captured the governor's office. Still, it couldn't have been accomplished without the complicity of 53 Republicans and one Independent (five Democrats voted against it).

"We are closer to having an income tax in New Hampshire than at any time in our history," an emotional House Speaker Donna Sytek [R-Salem], said last night. She blamed the historic passage on "a lot more Democrats in the House, a lot more Democrats in the Senate, and a Democrat governor who did nothing to stop it."

Government is expanding even in New Hampshire, at least in part imported by emigrees from down here in the Peoples Republic who hope to escape the burdens of Taxachusetts yet infect their host with expectations of entitlement.

But how much of this seismological shift in a philosophy long chiseled in granite is due to a broader, "I'm all set," attitude' that seems to pervade -- or has replaced -- today's political discourse?

Those of us who believe in and live "eternal vigilance" will need to redouble our efforts to pick up more of the "I'm all setters'" share of the load. Like the coal mine canary, when New Hampshire starts to wobble and waver, the threat is imminent and the stakes have increased.

Chip Ford --

The Boston Globe
Friday, March 5, 1999

N.H. vote imperils a no-tax tradition
Levy on income OK'd; veto vowed

By Ralph Jimenez

CONCORD, N.H. - A cherished New Hampshire symbol trembled yesterday when the 400-member House of Representatives voted to enact the state's first personal income tax.


Political observers say passage of the bill by New Hampshire's new Democrat-controlled Senate is virtually assured.

But after yesterday's vote, Governor Jeanne Shaheen, a Democrat, said she plans to veto any income tax that is not approved by statewide referendum. If the measure were to become law, New Hampshire will lose its status as the only state never to have enacted a broad-based sales or income tax.


Passage of the combined 4 percent income tax came despite Shaheen's threat and a furious antitax advertising campaign backed by some of the state's most influential business executives, its Republican congressional delegation, and four past Republican governors.

The ads warned, "We need not look any further than to our neighbors in other New England states to see that the result of an income tax will be an exploding bureaucracy and rapid expansion of the size and scope of state government."

If the tax were enacted, it would alter the flow of tax dollars between New Hampshire and neighboring states. New Hampshire would gain about $60 million in income tax revenues now paid by residents who cross the border to work in Massachusetts, according to state Senator Mark Fernald, one of the bill's sponsors.


Ecstatic income-tax proponents said the vote marked the death of the vaunted anti-tax "pledge" that all successful gubernatorial candidates in recent decades have taken.

"We are making up for 100 years of propaganda around this place," said Senate President Clesson "Junie" Blaisdell. "People know that the way we've done it over the years is wrong."

Advocates said the vote also spotlighted the waning political power of the state's biggest newspaper, The Union Leader of Manchester, whose conservative publisher, the late William Loeb, crafted the pledge.


State Representative Elizabeth Hager [R-Concord], the prime sponsor of the new tax bill, said its passage in the House also signaled a shift away from strict conservative domination of the state's Republican Party.

"This has always been a Republican state and it still is, but these people were ready for an income tax," Hager said. "This is the fairest way to do it."

Associated Press
Friday, March 5, 1999

Pigs are flying
By Adolphe V. Bernotas

CONCORD, N.H. (AP) - Who would have believed it? A broad-based tax for New Hampshire. Generations of conservative New Hampshire politicians of both parties are turning in their graves.

The 400-member House on Thursday committed what has been a political mortal sin for the past five decades. By a vote of 194-190 it approved a "broad-based" tax - a combination income and statewide property tax - and sent it to the Senate.

The last time something similarly unthinkable in the "Live Free or Die" state happened was 18 years ago when the House approved a personal income tax that got nowhere in the Senate.

This time, the Senate is different. Democrats are in control for the first time since 1912 and broad-based taxes are no longer anathema in the Senate.

This time the governor and the Legislature are under extreme pressure to come up with enough money to pay for a new way to fund education. The state Supreme Court gave them until April 1 to come up with an alternative to the unconstitutional local property tax.

The state has taken pride in the fact that it was the only state for a time, and now one of only two states, without a general sales or income tax. Alaska is the other.

The state supports itself with a jumble of taxes on telephone bills, eating out, renting rooms, interest and dividends, business, property sales, beer, cigarettes and its hard-liquor monopoly.

Think of the worst, most scrofulously repulsive, insulting, sacrilegious obscenity you have heard. "Broad-based tax" in New Hampshire's conservative political vocabulary is worse, or used to be.

Opposing broad-based taxes has been a political act of faith. New Hampshire gubernatorial candidates solemnly have performed a political ritual known as "taking the pledge," a vow to veto a broad-based tax.

With support from the staunchly anti-tax The Union Leader of Manchester, the only statewide daily newspaper, the pledge ritual was begun by the late Gov. Wesley Powell, first elected in 1958, and consecrated in the 1970s as a political sacrament by Gov. Meldrim Thomson, who coined the slogan "Ax the Tax."

Studies since the 1930s have recommended broad-based taxes, but all attempts to enact them have failed, and gubernatorial candidates who have failed to take the pledge or espoused such taxes have been defeated.

Democratic Gov. Jeanne Shaheen has taken the pledge, but what will happen to that vow remains to be seen if the Senate passes the tax. She has said she might reconsider if it is part of a referendum, and approved by voters.

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