In the third link above, I couldn’t help but notice that both Alaska and New Hampshire have neither state income tax nor sales tax. I suppose I can see how Alaska gets its revenues (natural resources) but I don’t understand how New Hamphsire can conduct its business without resorting to those taxes. How does New Hampshire do it?
[sup][sub]Thanks
- KG (who’s thinking about moving to New Hampshire) [/sub][/sup]
Thanks for the link, but I still don’t understand how NH can avoid (?resist) collecting sales and income tax.
The taxes listed in the link seem fairly modest compared to the gigabucks available from sales and income taxes. And if NH can do it, why not the other states? Is the NH standard of living any worse than, say, Maine?
No, NH is a great state. It is mainly rural so they do not need to collect income tax or sales tax. There is very little redistribution of wealth compared to most states. In fact, I believe that NH is the most libertarian of all the states if not the world. I went to Dartmouth and I never would have left if there were jobs that I was qualified for.
Now, NH does not neglect all taxes. Property taxes are very high. My wife’s parents own a weekend retreat with 300 acres of farm land, cows, and horses. The property taxes alone amount to 10’s of thousand dollars per year.
First of all, New Hampshire doesn’t need as much money as more urban state.
Where the money comes from:
property tax
sales tax on a few specific items, such as restaurant food, hotel rooms, and gasoline. What do these items have in common? Tourists buy a lot of them.
The main highway has tollbooths. Commuters buy rolls of tokens for a discount, but tourists probably pay full price.
We have state liquor stores: the state has a monopoly on hard liquor sales, and also sells wine. One of these stores is located in a highway reststop - to serve the tourists heading for our lakes and mountains. (Beer and wine are also sold by just about every grocery or convenience store.)
We have gambling - both dog and horse races, and there are slot machines at the racetracks. I believe the tracks are privately run, but the state must get its cut. The state sells lottery tickets.
Automobile registration costs somewhat more than in other states The state doesn’t have inspection stations - you have to pay a garage to inspect your vehicle.
The state sells permits for hunting, fishing, ATVs, snowmobiles think, concealed weapons, etc.
Um, let’s not forget the Business Profits tax. This is the main source of money for the state. And there is an income tax, if only on interest and dividends.
Until very recently, nearly all school funds were raised locally, hence the high property taxes. This lead to a huge disparity in the quality of education between the rich and poor towns. A lawsuit about 5 years ago ended up with the State Supreme Court ruling that this situation was unconstitutional, as all kids were to be granted the same level of education. Right now there is a statewide property tax to fund education but it’s a HUGE point of contention in the state. Expect changes soon.
The state government does less than most other states, leaving the cities and towns more of the burden, which is passed on to property-owners. Out-of-staters own a significant percentage of that, in the form of vacation homes, and pay highway tolls to get there. Speed traps set up by small-town police departments raise a considerable amount of revenue, too, and there have been analyses showing a much higher ticketing rate for out-of-staters.
So the less-charitable conclusion, from this person who commutes via a New Hampshire toll plaza each way, is that New Hampshire government is parasitic. The can collect less tax money from themselves because they tax the neighbors instead.
The biggest feature of the NH political landscape is “The Pledge” - a candidate who actually wants to win is forced by the conservative establishment never to support either a sales tax or an income tax. That may be softening now, with more of the outside world affecting political thought there than when the choleric Manchester Union-Leader dominated, but they’re still a long way from responsibility. We can see that now in the debate over the leveling of school funding that the state Supreme Court has required.
But for the most part, NH culturally is West Virginia with a covering of ice, and economically it’s Delaware without a corporate tax base.
Now, can you guess where I live, and what state I have to commute through every day?
My only speeding ticket in the last five years was for the heinous act of doing 74 miles per hour in a 65 zone. Can you guess which state I was visiting?
I believe the tex free NH beer and liquor is only supposed to be consumed in that state. That’s why they put those big Liquor Stores on the interstate, 15 minutes from Maine and Mass.
You say high property tax rates. But how high is high?
" Automobile registration costs somewhat more than in other states The state doesn’t have inspection stations - you have to pay a garage to inspect your vehicle. "
I don’t know about that. I know a guy who registered his 63 vw bus this year there for $15.00
Just wanted to hijack a minute and dispell the myth that NH is largely argicultural.
In fact, NH is rather poorly suited to argiculture, and only 1% of the workers in the state work in agriculture. (encarta.com)
I can’t find the cite now (I think it’s in Encylopedia Britannica, which is no longer free), but I remember reading that NH is the 5th most industrialized state in the US.
The short answer to your question is tourism, which is NH’s #1 indusrty. As previously mentioned, the taxes that NH does levy (in addition to its high property tax) are generally aimed at tourists, most notably the 8% rooms and meals tax.
Actually, I doubt tourism is the state’s #1 industry, but it is very important. The high tech companies in Nashua, Merimack, Manchester, Bedford, Salem, etc are extremely important to the state in terms of business profit taxes.
Agriculture is still important, mainly in forest products. Logging for pulp and timber, as well as a fuel source for the biomass power plants still generate a lot of business.
In the 1830’s NH was about 75% cleared land, for farming. Now it’s less than 20% cleared, IIRC. Farming has pretty much disappeared as a major industry.
For car registration, it’s based on assessed value. Older cars are much cheaper to register. Inspection is run at garages, but the fees are pretty much the same everywhere.
While tourism may or may not be the number one industry, the state has to get the money from those tourist either by taxing them on accomodations and meals or by taxing business on their profits.
Someone should post figures that show what percentage of the state budget is gathered from individuals through taxes of any kind, (property, etc.}. Does the average individual living in a $100, 000. house pay more in total taxes to the state than someone in Ohio? Mississippi?
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