Sunday, November 30, 2008

Is A Tax Revolt In New Hampshire Imminent?

With the economy slowing down and tax revenues down, towns, cities and states are tightening their belts. In some cases the taxpayers are trying to force their communities to live within their means by petitioning for and voting in tax caps, which limit the amount of tax increases, and in turn, spending increases.

Two cities in the Granite State have been fighting off the taxpayer initiatives, in some cases by ignoring ballot petitions or delaying them in an effort to quash them.

To listen from the rhetoric coming from Manchester and Concord you'd think it was selfish and irresponsible of the taxpayers to ask for controls on spending and taxes. Somehow they have come to believe the taxpayers should just shut up, pay up, and stop questioning the 'wisdom' of the aldermen/city council. After all, if such measures were put in place the cities might have to cut services, the ones usually mentioned being police and fire protection. It's one of the bludgeons used in the past to scare the taxpayers into inaction or capitulation. But in most cases it is a lie. The tax caps force the city governments into more careful and frugal spending, to make the hard choices, just as any of us make when money is tight.

One commenter to the article linked above thought that imposing more taxes would somehow solve the problem.

..[W]e trim everything we can in our town budgets to help offset the pain of onerous property taxes that squeeze us just so we don't implement a sales or income tax! The tourists will still come if we institute a sales tax; rich will still live here if we institute an income tax!

Oh, yeah! Let's raise taxes during a recession! Just what the New Hampshire economy needs.

My biggest problem with the solution is that it gives the legislature a blank check to spend like there is no tomorrow. The commenter also makes the assumption that a broadbased tax will lessen the property tax burden in the state. But as history has shown again and again and again, it doesn't. All that happens is new taxes are imposed and property taxes continue to rise. There is never relief from the property taxes. Every state that has used that as a reason for a broadbased tax has found that to be so. Spending does not go down, government expands, and the taxpayer ends up with even less money in their wallet. So much for property tax relief.

The only way to prevent higher taxes is to prevent higher spending. If money gets tight, spending cuts must be made. A number of services or programs are not need-to-haves, but nice-to-haves. Some duplicate the efforts of other services or programs. At times programs or services meet the needs of very few, yet are funded at the expense of other services that meet the needs of many. There are times when spending cuts must be looked at dispassionately, must use cost/benefit analysis to decide which ones do the most good for the most people.