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Editorial: There’s a way out of regressive taxes

Does New Hampshire have a revenue problem (raise those taxes) or a spending problem (cut that budget)?

It depends who you ask, but a quick look at some proposals floating around Concord will have you believe that Democrats in the state Legislature are looking to find new sources of revenue to avoid making some painful decisions. If that’s the case, they’re looking in the wrong place and they’re doing so in a way that could ultimately make it even more difficult for working class families to find traction in this slippery economy.

In the world of revenue, you have progressive taxes, which means the more you make, the more you pay. And you have regressive taxes, which in general terms means those making the least shoulder a relatively larger load. These regressive taxes often show up with the things we buy in our everyday life.

That’s why the proposed beer tax, and especially the gas tax, are bad for New Hampshire. The taxes impact those who can least afford them.

Rep. David Campbell, a Democrat from Nashua, has proposed a 12-cent-per gallon increase that will be phased in over three years. The state gas tax is currently 18 cents a gallon, and it hasn’t been raised in more than two decades. That archive photo you see in “The Way We Were” on this page will give you an idea of what we were paying per gallon in the early 1990s. Only nine states have a current gas tax that reaches the 30-cent-a-gallon threshold.

The money would be allocated to build, maintain and repair state highways and bridges. Much of this work would be done on the Interstate 93 corridor. There’s no doubt about the need in that part of the state, and deteriorating infrastructure remains an issue here in rural New Hampshire, where highway dollars are often harder to come by and delays in state assistance for critical bridge repairs can leave towns with seemingly permanent detours. (Ask Francestown if they could use the help.) But the gas tax that will fund this work will be financed almost exclusively by those residents and small businesses already struggling with small pools of resources at their disposal. Meanwhile, the increased taxes at the pumps will be a mere drop in the tank for those pulling in the largest incomes.

The same can be said for the proposed beer tax. Democrat Richard Eaton of Greenville is one of two legislators pushing for a 10-cent per gallon increase on beer. The new revenue would help fund alcohol abuse treatment and prevention. Again, a worthy cause in need of state funding, yet one that places obligations for spending disproportionately on small business, such as breweries, and consumers.

Road repair and substance abuse are critical issues, but the longer we refuse to consider the benefits of a state income tax, the more we’ll see these misguided efforts to find new revenues in the only places legislators can look ­— at the everyday consumer — with the only tool available — regressive taxes and fees.

A New Hampshire income tax doesn’t have to mean a larger state government. But it would certainly mean a more equitable one.

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