As we move closer to the election people are now talking about the proposed Constitutional amendment on income taxes. Below is what I feel will happen if we enact this CACR amendment. This was originally written in October of 2011, just before the vote to approve the CACR.
This week the House Ways and Means Committee voted straight down party lines (15-5) to approve CACR 13. This is a bill that would change the State Constitution to read:
[Art.] 5-c. [Income Tax Prohibited.] No new tax shall be levied, directly or indirectly, upon a person’s income, from whatever source it is derived. (1)
This sounds very simple, and for many people they would agree “No Income Taxes forever”. This is how the House Leadership is pushing this resolution. By adopting this resolution to the New Hampshire Constitution the State cannot create a new tax on your income. I want to know what exactly are “Indirect Taxes”. This creates a large area of uncertainty in the language of this bill. If you think about anything charged by the State could be levied as an “Indirect” Tax on your income. Does this mean that it would take a Constitutional Amendment like this to charge $1.00 more change the registration costs of your cars? Yes, I believe it does.
In a Press Release (2) from House Speaker Bill O’Brien he says:
“The passage of CACR 13 is a great protection against future generation big spenders and ensures the state’s tradition of frugality and local control. I am confidant when the legislation reaches my colleagues in the House for a vote they too will support the measure to further protect the New Hampshire Advantage. We must remain good stewards of taxpayers’ money. Good government is one that serves the people and is limited and fiscally prudent.”
Is this really a good idea? I like living in New Hampshire and I like not having an Income Tax, however this Constitutional Amendment is much more that that. There are some good and bad things about this being pushed as a Constitutional Resolution.First, the Resolution must pass by 2/3’s the house. With the Super Majority that Could Happen.Second it must go before the Voter’s on the 2012 Ballot. It will read:
IV. That the wording of the question put to the qualified voters shall be:
“Are you in favor of amending the second part of the constitution by inserting after article 5-b a new article to read as follows:
[Art.] 5-c. [Income Tax Prohibited.] No new tax shall be levied, directly or indirectly, upon a person’s income, from whatever source it is derived. (3)”
Notice how it is marked as Income Tax Prohibited. This is not just about Income Taxes, (have I said that enough yet). It is about FEE’s. So while the House is pushing to reduce the Fee’s on Enterprise Taxes, Meals Taxes, and Communications taxes (HB 37, HB 154, HB 166, and HB 213) they would be making it nearly impossible to ever change these fee’s again. Some of you may remember when the Meals Tax in New Hampshire was only 5%, or 8% in the 2000’s. These small increased are what keep New Hampshire operating and help to keep the “Broad Income Tax” out of New Hampshire.By passing this resolution in order to change any fees or taxes you would have to amend the NH Constitution again. Therefor requiring a 2/3’s majority and voter approval to make the change.
You don’t have to take my word for it!
Rep. Susan Almy, D-Lebanon, led Democrats in fighting the amendment. She said the bill, “is nothing like simple, or clear, I’m afraid.”
Almy argued that by barring even indirect taxes on income, the amendment would block new taxes of all kinds, because all taxes are paid from income.
“I can see us fighting over the meaning of the Constitution on every tax change,” she said. (4)“
It costs money to run the state and inflation and rising costs require small changes to the fee’s and taxes set forth by the state. Can you imagine what our state would be like if we were operating on a budget that from 1970? As bad as some of our roads and bridges are now, how much worse would it be if we had no money to fix them. What about our schools? Is the House Leadership saying they the schools will never need more funding from the State than they currently get? We all know this is not the case. I hope that this resolution will not be another partisan issue in the House. I hope that all of our State Reps understand that by locking this into the NH Constitution they will forever tie the hands of our State Legislature and slowly eat away at the state budget till we cannot afford anything.Even though this seems like a simple short line amendment, it is very confusing. It is a bad way to run a business and even worse for our State. Now lets all say it together, “Its not just about Income Taxes”.