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Vermont and New Hampshire — A tale of two states

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Vermont and New Hampshire — A tale of two states
By Jeb Bradley
Posted Oct 27, 2017 at 8:11 AM

The Caledonian Record, a St. Johnsbury, Vt., newspaper, recently published a very insightful editorial titled “Tale of Two States.”

In this editorial, it compared the tax climate and cost of living in Vermont and New Hampshire.

Here are some of the salient points of the Caledonian Record editorial:

According to recent Census Bureau data New Hampshire’s median household income ranking is the nation’s highest and 30 percent greater than the national median;

New Hampshire has the lowest poverty rate in the nation, while Vermont’s poverty rate increased by 10,000 people last year;

New Hampshire has the 7th best business tax climate in the nation, while Vermont ranks 46th;

Vermonters pay 12.1 percent of their income in state taxes, compared to New Hampshire’s 8.3 percent.

The Caledonian Record draws these compelling conclusions:

“The pro-growth, low tax approach leaves New Hampshire with a more impressive, enviable overall fiscal state. The Union Leader reported ‘the New Hampshire treasury is stronger than it’s been in years, with annual revenue for the fiscal year ending on June 30 running almost $100 million over budget.’ Vermont, in contrast, exists in a perpetual state of tax increases and budget deficits.

“Vermont suffers the highest confluence of income taxes, property taxes, tax progressivity, estate taxes, minimum wage and cost of living in the nation.

“The trends, and causes, of Vermont’s woes and New Hampshire’s victories are unmistakable. Opportunities fall in proportion to rising levels of taxation and costs of living. Unfortunately for Vermont, talented, innovative job creators often harbor a crazy notion that they should actually be allowed to keep some of their hard-earned wealth and look to friendly places like New Hampshire to set up shop.”

In my view, the Caledonian Record perfectly describes what we call the “New Hampshire Advantage”.

But it wasn’t always so. In 2010, New Hampshire faced large deficits, slow job growth, higher unemployment and tax increases, most notably the LLC tax. That tax was targeted at business owners and was so odious it was soon repealed.

Voters took notice, and in 2010 sent a new Legislature to Concord: leaders willing to make difficult decisions to protect taxpayers, balance budgets and grow jobs.

Spending had to be cut. Public pensions needed reform because costs for school, town, and county taxpayers were soaring. Tax hikes many wanted were killed.

Our budget stabilized while the economy improved — helped by an improving national economy. However, despite neither a sales nor income tax, New Hampshire was not competitive with other states as our business taxes were the 48th highest in the nation.

In 2015 and 2017, the Legislature worked to lower taxes on business owners. While some have derided this tax relief as “taking care of the entitled and wealthy elite” the facts speak otherwise — clearly!

New Hampshire’s unemployment rate is 4th best in the nation.

Our job growth is among the nation’s best.

Our median household income is the nation’s best and New Hampshire residents living in poverty is the nation’s lowest.

Tax revenue, especially from business taxes, has soared despite tax cuts. Strong revenue has allowed spending increases on the heroin crisis, mental health, families with disabled children, and the agency that protects abused and neglected children.

And in 2019, the tax on electricity paid by every resident — will disappear!

High business taxes are not the only issue facing our state. Workers’ compensation costs were sky high. Key reforms the Legislature adopted in 2015 are working and those costs have decreased nearly 25 percent.

It’s not the time to rest on our laurels. We face high electricity and health care costs while employers have difficulties hiring qualified workers.

It is important that we develop new sources of energy, both traditional and renewable, that are environmentally acceptable and drive down costs.
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