Viewpoint: Republican leaders foster stagnation, inequality

  • The floor of the New Hampshire Senate at the State House in Concord. PHOTO BY ELIZABETH FRANTZ / Monitor staff

Monday, July 24, 2017 6:57PM

No wonder so many people are weary and frustrated and angry.

For decades, all economic growth in this country has funneled to people on the top rungs of the economic ladder. Since the 1970s, pre-tax income adjusted for inflation has been flat for most adults, but has risen 121 percent for the top 10 percent, 205 percent for the top 1 percent, and 636 percent for the top 0.001 percent. US census data reveals that the gap in income between rich and poor has been widening at a greater rate in NH, where historically there has been relatively less inequality, than anywhere else in the nation.

This extreme and growing imbalance is a festering wound, upsetting at the personal level and destabilizing at the state and national levels. Gutting Obamacare by stripping away healthcare coverage from more than 20 million Americans, as proposed by Trump, Ryan and McConnell and other Republican legislators in Washington, would deepen the frustration and outrage. So would any favorable action on pending federal budget proposals by these Republican leaders that combine tax cuts for the rich with essential service cuts for just about everyone else.

Rubbing salt in the festering wound of growing inequality has been our state government’s failure to effectively respond. Unfair taxation is near the top of the failure list. Although Article 5 of our NH Constitution calls for “proportional” taxation, the net effect of our unique NH collection of narrow-based taxes is decidedly dis-proportional, with the rich paying about two-thirds less per dollar of income than almost everyone else.

In this context of growing inequality and blatantly unfair taxation, NH’s Republican leaders have chosen repeatedly to use their legislative power to cut our business taxes, the only components of the NH tax system that tend to fairly apportion the tax burden to high wealth, high income taxpayers. When fully realized in 2022, the business tax cuts pushed through by the Republican majority will reduce the state’s business tax revenues by about 22% (about a $200 million per year loss in state revenue in 2022, assuming normal inflation and growth rates). This will be a huge windfall for the international corporations, mostly based out-of-state, that are now responsible for about 60% of all state business tax revenue.

With new evidence in hand, one would think that those in this state who have pushed so hard for high-end tax cuts would be ready to abandon their “trickle down” fantasies. Consider this June 14, 2017 report by Business Insider: “Last week, the Republican-controlled Kansas legislature took the remarkable step of overriding the governor’s veto, finally repealing his signature tax cuts. Those tax cuts, which reduced personal income tax rates and imposed no tax at all on many kinds of business income, went into effect in 2013, and were touted by Brownback and other leading supply-side figures as the best way to boost growth, bring back jobs, and make Kansas richer. But now, almost five years into Brownback’s “real live experiment” in trickle-down economics, the evidence from the experiment is in. Brownback’s hypothesis about taxes and growth was decidedly not proved. And even Kansas Republicans have had enough.” Unfortunately, we have Republican leaders in NH who continue to mouth the tax-cuts-pay-for-themselves nonsense.

The sense of unfairness, of stagnation, felt by so many will only grow as our state government is forced, by the inevitable reality of shrinking state tax revenues, to continue to back away from its core responsibilities. Driven by NH’s business tax cuts, local property tax rates will again be forced up, disproportionately hurting relatively poor communities. Teacher and other local public sector retirees, along with nursing home residents and their families, and public education students and their families will increasingly find their pensions, health care and education dependent on the good will of economically-struggling local property taxpayers. Students attending NH’s public colleges, a group that already carries the highest average student debt in the nation, will find that tuition is up as the value of the state’s support for postsecondary education continues to erode. Children in high-risk circumstances will suffer unnecessarily in the absence of sufficient state-funded voluntary protective services and pre-school care. Progress in developing needed mental health and drug-addiction services, a positive development in recent years, will be slowed or stopped.

We can do better than this – much better. We can work for real tax reform, while attending to revenue and equity concerns. Real bi-partisan healthcare reform is achievable, but only if empty partisan-driven slogans and agendas are set aside, And movement towards a living wage, supported from below by an economically meaningful minimum wage and enabled by strong collective bargaining protections and good education and training opportunities for all, would help a lot.

Dick Ames and Doug Ley are State Representatives for Cheshire 9 (Dublin, Harrisville, Jaffrey and Roxbury).