House Democrats Expand Their Push For Income Tax

Although House Ways and Means Chair Susan Almy, D-Lebanon, acknowleded there “isn’t any chance an income tax will past this year”, House Democrats continued to lay the ground work for one in their subcommittee work on House Bill 642 Tuesday afternoon.

The meeting included a  scolding  of Department of Revenue Administratrion Commissioner Kevin Clougherty from a Democrat  in the crowd (Rep. Barbara French) and from Committee member Bill Johnson, of Gilford.

Since we almost passed an income tax ten years ago, they told Clougherty that his department should be more prepared with an estimate of how much it would cost to administer such a tax.   The fiscal note on the bill calls for  a whopping $20 million in new bureaucracy were such a combination income/statewide property tax to pass.  DRA would have to hire dozens of new people and maybe even rent an entire new office building.

Of course, Johnson and his Dems were wrong in their contention that an income tax nearly passed ten years ago.  One version passed the House by four votes (194-190) on a fateful day when only seven Democrats voted against it but they were given cover to cave in to leader Peter Burling knowing that Governor Jeanne Shaheen had threatened the veto the legislation.  When a different version came back from the Senate, it was defeated by a wide margin, with some 30 Democrats voting against it, so in fact, it didn’t come close to passing, and DRA rightly felt no compulsion to get its administrative costs in order back then (nor should it now if we are to believe Chairman Almy).

Such revisionist history as Johnson asks us to endure is part of the overall Democratic strategy to gather information for this income tax boondoggle and slap it on us next term.  When all is said and done, House Bill 642 would raise an addtional $800 million or so.  No wonder Lynch and his Democrats aren’t worried about failure to meet revenue estimates.  They have the income tax bill up their sleeve.

Republicans didn’t do so well at today’s meeting either.  The ranking Republican on the panel, Norm Major of Plaistow, walked out midway through the session, and the other two Republicans on the 10-member panel said nothing.  One of them is pro-income taxer Pricilla Lockwood.  Isn’t that great–half the Republicans present were pro income tax!

Isn’t time for leader Sherm Packard to put Republicans on Ways and Means who are serious about facing down these Democrats and their plans to put an income tax through come hell or high water?  (Wake up Sherm, it’s later than you think.  Should an income tax pass, you’ll be as much to blame as the Dems!)

The income tax in the bill would be at a 5 percent rate with exemptions of $15,000 per filer and $10,000 per child.  The income tax portion of the bill would generate approx. $800,000,000.  The statewide property tax would be raised to $5.50 per thousand (with a $200,000 homestead exemption) raising another $700 million according to DRA.  Since much of the Business Enterprise Tax is geared toward income and since the interest and dividends tax is considered a tax on income, those two taxes would be repealed. 

The Business Profits Tax is lowered by one percent, down to seven and a half percent, although Rep. Johnson contended that might not be possible.  In other words, we might need to keep even more monies, according to Johnson who was the lone Democrat to win (barely) in a highly Republican district in 2008 and who will certainly be targeted by the state GOP come 2010. Rightly so.

Chairman Almy plans to ask a UNH economist to inform the panel in early September about the business ramifications of this income tax bill.

A full vote by the subcommittee (presumably against it) is expected in late October.  Even though it won’t pass, Commissioner Clougherty is expected to use dozens of man hours to get answers to committee questions, this at a time when DRA doesn’t seem to have the time to get numbers for the revenue plan in place!