Last spring, when the GOP House leadership insisted on cutting the state cigarette tax by ten cents a pack, the Department of Revenue Administration estimated the tax cut would cost the state $14 million in revenue if sales were consistent with the previous year.
House Speaker Bill O’Brien, however, argued the tax cut would actually increase state revenue:
“This tax cut is an important step to regain our advantage and bring business here to New Hampshire. We strongly believe that reducing this tax will result in more revenue, more economic growth and more tax cuts.”
Kevin Landrigan reports state officials now project that the cut will result in a revenue shortfall of — surprise, surprise — $12-$15 million for the year.
[Administrative Services Commissioner Linda Hodgdon] confirmed that through nine months the tax is $11 million off forecast, and $9 million of that is attributed to the tax break.
State officials can now accurately compare pack sales through this nine-month period to the previous three quarters last year when the tax was higher.
At this rate the tax cut could cost the treasury at least $12 million and as much as $15 million for the year.
When Treasury Secretary Tim Geithner testified before the Senate Budget Committee, New Hampshire Sen. Kelly Ayotte was vocal in her criticism of the administration for not embracing the Bowles-Simpson deficit reduction recommendations — until she was asked about the report’s proposals for raising revenue.
Geithner was responding to questions by Sen. Kelly Ayotte (R-N.H.), and at one point turned the tables on her. He asked Ayotte if, given her “affection” for Bowles-Simpson, she would support its tax reform that raised trillions in revenue for deficit reduction.
“Are you willing to embrace the broad balance of Bowles-Simpson? Then there is a lot to talk about,” he said.
Ayotte would only say that it is up to the president to take the lead on the budget.
The Constitution is a statement of principles and rights, and the architecture of our form of government. O’Brien and Bettencourt are using a document that our forefathers fought a revolution for [for] petty political gain.
— Kathy Sullivan, DNC member and former state party chair, on House passage of CACR 13, a proposed constitutional amendment to prohibit new taxes on income.
Writing in support of CACR 13, a proposed constitutional amendment to prohibit new taxes on personal income, state Rep. Keith Murphy (R-Bedford) says it would be an “incredible injustice” to ask the New Hampshire residents to pay some portion of their income to support their state government.
[T]he income earned by the citizens of our state is theirs and theirs alone, through their hard work and risk and savings. Granite Staters of every profession and income level work hard … and it would be an incredible injustice for the state to demand some portion of that money.
In an unrelated op-ed, former Congresswoman Carol Shea-Porter responds.
We benefit when we “pool” our money. As citizens, we have a common interest in creating and sustaining a great nation that can pay its bills and invest in its people. Clean up duplicate efforts. Catch the cheats. Hold recipients of our money accountable. But Oliver Wendell Holmes, Jr. had it right when he said, “Taxes are the price we pay for a civilized society.
The New Hampshire House is expected to vote on CACR 13 tomorrow.
Ann Kuster says extending the payroll tax cut is a “no-brainer.” If Congress refuses, she says, nearly one million Americans will lose their jobs, economic growth will slow and the country could fall into another recession. “So why does Bass want to raise taxes on hard-working New Hampshire families?” Kuster asks.
We can cut payroll taxes for hardworking New Hampshire families and help stimulate the economic recovery. A household earning $50,000 a year would get a $1,500 tax cut - $125 to spend every month on food, gas and other essentials. The non-partisan Congressional Budget Office even says that cutting payroll taxes is more effective at promoting economic growth than tax breaks for the rich.
Yet Congressman Charlie Bass has voted to protect tax breaks for billionaires and Big Oil while blocking this critical middle-class tax cut. No wonder New Hampshire voters believe Congress is broken.
This debate shows Bass’s true colors: He supports tax breaks for billionaires and Big Oil but opposes tax relief for 160 million hard-working Americans.
Ask Congressman Bass, whose side are you on anyway?
New Hampshire Congressman Frank Guinta has a solution to reduce the deficit and create jobs “without borrowing a single dime or raising taxes.” All we have to do, says the freshman lawmaker in a letter to House leadership, is offer a tax holiday to U.S. companies that have more than $1 trillion in profits stashed in overseas subsidiaries.
“The freshman class was elected last year to get Washington’s fiscal house in order. Repatriation is a simple, direct way to help do that. We don’t need another massive infusion of additional borrowed money in an attempt to artificially stimulate the economy and create new jobs. We need genuine reforms that will encourage American businesses who are currently parking billions of dollars overseas to bring that money home and grow our economy here. That will significantly expand the government’s revenue base and free businesses to create badly-needed jobs, too, all without borrowing a single dime or raising taxes.”
Sound too good to be true?
It’s a seductive argument — reap billions in tax revenue from money that’s currently untaxed and generate economic growth to boot. On closer inspection, though, the coalition’s argument has some logical loopholes. An almost identical holiday passed by Congress in 2004 and taken mostly in 2005 did little to boost jobs or investment, according to several independent economic studies.
The 2005 repatriation “did not increase domestic investment, employment, or R&D,” but did boost share buybacks, concludes a forthcoming Journal of Finance article by Illinois’ [Dhammika] Dharmapala, C. Fritz Foley at Harvard Business School and Kristin J. Forbes at the Massachusetts Institute of Technology Sloan School of Management.
One anecdote makes the point acutely: Hewlett-Packard, even as it was pulling its $14.5 billion home from abroad, announced plans in 2005 to reduce its workforce by 14,500.
The Portsmouth Herald calls on House Republicans to repeal the tobacco tax cut. And while you’re at it, they write, get rid of Speaker Bill O’Brien and Majority Leader D.J. Bettencourt.
The tortured logic used to justify New Hampshire House Speaker Bill O’Brien’s insistence on cutting the state’s tobacco tax by 10 cents a pack has cost the state $11 million since July, and it will continue to cost the state millions of dollars until common sense prevails and the tax cut is repealed.
On this issue, it seems the House leaders who like to say they are fiscally responsible are either blinded by ideology or so beholden to special interests that the lies just effortlessly flow from their lips.
It’s time to repeal the tobacco tax cut and it’s also past time for House Republicans to find leadership better able to represent the interests of the people of New Hampshire rather than corporately funded ideologues.
Mark Fernald, 2002 Democratic nominee for Governor, blames the failure of the serious deficit reduction on Republican lawmakers whose concern is ”ideology, not governing.”
Five changes to our federal tax code — allowing the Bush tax cuts for the wealthy to expire; eliminating preferential tax rates for dividends and capital gains; eliminating tax breaks for oil and gas; plugging the holes in the corporate income tax so that it brings in revenue similar to other countries; and a financial transactions tax — would bring in $337 billion a year
Simple math dictates a balanced approach to the deficit problem, but Republicans cannot do math any more, they can only do pledges. The Republicans — including Congressman Bass, Congressman Guinta, and Senator Ayotte — are committed to the Grover Norquist pledge not to raise any taxes, the deficit be damned. If Republicans stick by the pledge — and if voters stick by the Republicans — we have no hope of taming the deficit.
Let’s get this straight: The 2nd District congressman tells the Union Leader that he could envision supporting tax increases for people making $250k+ — if they take effect after 2014, mind you — but then tells a radio station that in his mind, tax hikes “are off the table.” Hello?
— Jeff Feingold (paywalled), New Hampshire Business Review, on Congressman Charlie Bass.
Ezra Klein says Republicans have had the superior negotiating position in the debt ceiling fight because Democrats are unwilling to even consider letting the country go into default.
Democrats are going to lose this one. Whatever deal emerges to raise the debt ceiling, we can be pretty sure it won’t include revenue, it won’t include stimulus, and it will let Republicans pocket a trillion dollars or more in cuts without offering anything to Democrats in return.
It’s difficult to see how it could end otherwise. Virtually no Democrats are willing to go past Aug. 2 without raising the debt ceiling. Plenty of Republicans are prepared to blow through the deadline. That’s not a dynamic that lends itself to a deal. That’s a dynamic that lends itself to a ransom.
But, he reminds us, the shoe will be on the other foot next year when the Bush tax cuts are scheduled to expire.
That amounts to a $3.6 trillion tax increase over 10 years, three or four times the $800 billion to $1.2 trillion in revenue increases that Obama and Speaker John Boehner were kicking around. And all Democrats need to do to secure that deal is — nothing.
This scenario is the inverse of the current debt-ceiling debate, in which inaction will lead to an outcome — a government default — that Democrats can’t stomach and Republicans think they can.
We know that meaningful deficit reform will mean trillions of dollars of changes. And in avoiding revenues, Republicans have instead proposed steep cuts, dangerous to both the health of the American people and the strength of the economy. Eliminating funding for basic women’s health care. Ending Medicare as we know it. Dangerous cuts to nursing home care. Slashing Pell grants that will train the next generation of engineers. Stopping the development of new energy technologies. And halting efforts to retool the economy to compete in the 21st Century. These are the alternatives that Republicans are proposing to save tax breaks for yachts and race horses.
In a speech on the Senate floor, GOP State Sen. Jack Barnes complained of the extraordinary lobbying effort from out-of-state tobacco companies for a 10 cents reduction on the cigarette tax.
“In all my few years up here I’ve never seen an industry twist and push our legislature the way the tobacco industry pushed. The robocalls that came in, calls I got the poor people were coughing and hacking, begging me to vote for the cigarette tax reduction. I do object to an industry pushing the way they did to get this 10 cents reduction.”
“Over the years, I have received campaign contributions from cigarette companies. If by some chance … somebody in tobacco-land sends me a check I’m going to happily accept it, endorse it and send it to the New Hampshire Cancer Society.”
Barnes then proceeded to vote for the budget bill that included the tax cut the tobacco companies had lobbied for. It is estimated the tax cut will cost the state $12 million in lost revenue over the next two years.
