While NH continues seeing push after push for the creation of an income tax it seems our neighbors to the south are seeing the opposite. The Coalition for Small Government is behind a current push to put a question on the ballot asking to abolish the MA income tax.
Since many NH residents along the southern end of the state trek daily over the border to jobs in MA this could be big news for their wallets with the state Department of Revenue estimating this to be a savings of $3,180 for a "typical" family. The Coalition estimates the savings to be closer to $3,600 per family.
Cutting income tax in MA would however cut away $11 billion in state revenue when their total budget is only 26.7 billion. That sounds rather shocking but it also assumes that none of that money would be spent on items with sales tax, sin tax or any other form of taxation. But yes eventually either spending would need to be cut or other taxes would need to rise to make up the difference. To that I say so?
The problem we often see in this country is that government hides how much it really takes from us. They take $50 here for a fee, another $2 in tax on an item we purchase, maybe another $100 for a permit etc. It doesn't occur to us that we pay out thousands and thousands of our hard earned dollars. That's the advantage NH has. By collecting the majority of taxes through a single tax, in our case property, people see how much they really pay and get upset forcing government to make some attempts to control spending. And considering as of 2007 we still had the 2nd lowest tax burden in the country I'd say we were doing something right.
MA doesn't have that advantage. They tax income, property, sales etc which allows government to get away with spending more before people start to get upset. By eliminating income tax MA citizens are going to force government to show how much the really take from each person a little closer since they wont have as many taxes to hide it and chances are you will see people become more upset. Chances are you'll see MA's tax burden creep down from 10.6% closer to NH with its 8%.