Lonely (for now) legislators push sales, income taxes

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A bill to tax sales of electronics in New Hampshire made news this week, and the bemused media coverage it drew was justified. Yet New Hampshire Union Leader State House Bureau Chief Kevin Landrigan saw a different, and more important, angle.

Landrigan put the bill in context and showed that it was one of several attempts to raise tax revenue through broad-based taxation.

The bigger story was not that a lonely representative proposed a kooky sin tax on consumer electronics (House Bill 1492). It was that a few legislators are trying to lay the groundwork for the eventual imposition of broad-based sales and income taxes.

Rep. Robert Schamberg, D-Wilmot, is the sole sponsor of CACR 17, a constitutional amendment to mandate that any broad-based tax “be enacted solely for the purpose of reducing property taxes by the same amount of revenue as raised by such tax.”

Sen. Jeanne Dietsch, D-Peterborough, is the sole sponsor of Senate Bill 474, to rename the state’s interest and dividends tax the “income tax on interest and dividends.”

Technically, the interest and dividends tax is a tax on income. But a mere technical clarification is not the point of the bill. The point is to undermine resistance to direct state income taxation.

“We need to see ourselves as a state in which half the people do pay income tax, a third pay interest and dividends and about a fifth pay half a billion dollars of income tax a year to Massachusetts to help educate not New Hampshire’s children but others,” she told the Senate Ways and Means Committee on Wednesday.

Each of these bills would serve the same common purpose, which is to lower resistance to broad-based taxes, making it easier to pass large-scale sales and income taxes in the future.

That there were only four sponsors among all three bills shows just how few legislators were willing to spend political capital on a doomed charge up a mountain. Still, the bills also show that hardcore support for sales and income taxes is alive and active in the Legislature.

Some legislators are particularly persistent. Sen. Dietsch last year introduced a payroll tax on income above $132,900 and helpfully clarified precisely what kind of tax it was.

“This is an income tax,” she said.

She gets full marks for determination and perseverance.

The persistence of these legislators raises another question. How would such bills fare were they not destined for the hands of a willing executioner?

The current governor has made clear he will veto a sales or income tax. That dampens enthusiasm in the Legislature for spending energy on such efforts. But one of his potential challengers announced last year that he would not take The Pledge.

The prospect of having an income or sales tax bill signed into law rather than immediately vetoed would be highly likely to change legislators’ calculus. This year, such bills are met with derision. That might not always be the case.