Nine years after the state began reducing business tax rates, five narratives are driving the policy discussion of those cuts. All five are false.  

In a new briefing paper, we debunk the five most common myths about the business tax cuts that ran from 2015-2022.

Background: From 2015-2022, legislators cut the Business Profits Tax from 8.5% to 7.5% and the Business Enterprise Tax from 0.75% to 0.55%. Opponents predicted that the cuts would starve the state of revenue, resulting in defunded programs, lower public school spending, and reduced aid to local governments. 

Those predictions continue to be asserted as fact. Official state data prove them false. 

Note: State spending numbers extend through FY 2025, but audited revenues are complete only through FY 2023. For that reason, we use revenue data only through FY 2023. 

Myth No. 1: Business tax cuts resulted in lower business tax revenues. 

Fact: Revenues from business taxes have more than doubled since the tax cuts began, rising by 124% from state Fiscal Years 2015-2023.

Source: State Comprehensive Annual Financial Reports, 2015-2023.

Myth No. 2: Business tax cuts reduced the share of state revenues paid by businesses. (“Businesses aren’t paying their fair share.”)

Fact: The share of state tax revenues generated by business taxes rose by 56% from 2015-2023. The share of total state revenues, including federal funding, paid by businesses rose by 40%.

Source: State Comprehensive Annual Financial Reports, 2015-2023.

Myth No. 3: Business tax cuts resulted in lower state aid for local governments and public schools.

Fact: State aid to local governments increased by $214 million from Fiscal Years 2015-2025, or 19%.

Source: Office of Legislative Budget Assistant report, “State Aid to Cities, Towns and School Districts Fiscal Year Ending June 30, 2024,” Oct. 1, 2024.

Myth No. 4: Business Tax Cuts reduced aid to public schools, resulting in property tax increases.

Fact: State aid to public schools increased by 15% from 2015-2024. (Both adequate education grants and total aid to public schools increased by 15%.) At the same time, public school enrollment fell by 16,373 students, or 9%, resulting in average per-pupil state aid rising by 26%, from $5,115 in 2015 to $6,469 in 2024.

Source: Office of Legislative Budget Assistant report, “State Aid to Cities, Towns and School Districts Fiscal Year Ending June 30, 2024,” Oct. 1, 2024, Department of Education Average Daily Membership reports, 2014-2024. *State adequate education aid is based on the prior year’s enrollment.

Myth No. 5: Revenue declines caused by business tax cuts are the reason for projected revenue shortfalls in Fiscal Year 2025.

Fact: Business tax revenues and total state revenues are dramatically higher, not lower, since 2015. However, from 2015-2025 legislators increased spending to match revenues. Had spending simply grown at the rate of inflation, slower revenue growth would not be an issue in 2025. 

Note: “Total State Revenue” in the chart below refers to revenue from state sources, excluding federal funds. 

Download this briefing paper here: Business Tax Cut Myths 2024.

 

Since New Hampshire began cutting business tax rates in 2015, state aid to municipalities and public school districts has fallen, according to a prominent political narrative. 

That narrative is false.

Aid to local governments and local school districts rose by by $214 million (19%) from Fiscal Year 2015 to Fiscal Year 2025, an October report from the Office of Legislative Budget Assistant shows.

A related false narrative asserts that if state aid to localities is up, that’s only because of federal COVID relief spending. 

This also is false. 

The $214 million increase in state aid consists entirely of state tax revenue. Federal COVID relief money and all other federal spending are separate. 

What about school districts? 

The state has increased adequate education grants and total state aid to public school districts since 2015. 

State adequate education aid rose by $139 million (15%).

Total state aid to public school districts rose by $148 million (15%). 

While state aid to public schools increased by 15%, public school enrollment fell by 16,373 students, or 9%. 

So although the total dollar increase might look relatively small, it is spread among fewer students, creating a larger per-pupil expenditure.

Looking only at state adequate education grants, the state government sent local public schools an average of $5,115 per pupil in 2015. That rose to an average of $6,469 per pupil in FY 2025 (the current school year), an increase of 26%.

Inflation over the last decade grew faster than the increase in state aid to local governments and school districts, eating away at the value of those increases. 

But the claim from tax cut opponents is not that the hundreds of millions of dollars in additional aid was consumed by bad federal policies that sent inflation soaring. The claim is that the state cut local aid in absolute terms because state revenues fell following the tax cuts. This is entirely untrue.

Not only did legislators increase local aid, those increases were funded by soaring business tax revenues, which have more than doubled since 2015. 

Local governments and public school districts received $214 million in additional state aid over the last decade, including a 26% increase in the per-pupil value of adequate education grants. If they raised property taxes during this time, the blame cannot be placed on state aid.

These increases do not include any of the $112 million in Local Fiscal Recovery Fund moneys distributed to towns, $994.5 million in American Rescue Plan and Coronavirus State Fiscal Recovery Funds allocated by the state, $486 million in ESSER funding for public schools, or other COVID relief funds sent directly from the federal government to cities. 

Businesses not paying their fair share. Shrinking state revenues. A tax burden shifted from businesses to property tax payers. 

Those were the predictions critics have made since 2015, when New Hampshire legislators began a series of business tax cuts. 

Not only did those predictions fail to materialize, but the exact opposite happened.

Since the rate cuts began, businesses tax revenues for the state General and Education Trust Funds have more than doubled, from $561.7 million to $1.2 billion.

And the share of state government revenues paid by businesses has risen, while the share paid by property taxpayers has fallen by more than half.

 

Business shoulder larger share of state revenues

New Hampshire has two primary business taxes, the Business Profits Tax (BPT) and the Business Enterprise Tax (BET). Starting in 2015, legislators began to cut these tax rates. 

From 2016-2022, legislators cut the BPT rate from 8.5% to 7.5%, and the BET rate from 0.75% to 0.55%. 

In Fiscal Year 2015, the last year before these rate cuts took effect, business taxes accounted for 11% of total general government revenues, the state’s Comprehensive Annual Financial Report shows. (These exclude business activities such as liquor sales, lottery sales, toll revenue and unemployment insurance taxes.)

In Fiscal Year 2023 (the last year for which we have final, audited data), business taxes accounted for 15.4% of total general government revenue, a 40% increase, the state’s Comprehensive Annual Financial Report shows.

At the same time, the share of total general government revenues paid through general property taxes fell by more than 50%. General property taxes comprised 8% of general government revenues in FY 2015 and just 3.6% in FY 2023. 

Those figures include federal funding. Restricting the analysis to state General and Education Trust Fund revenue alone, the increase is even more pronounced.

In 2015, business tax revenues accounted for 25% of General and Education Trust Fund revenue.

In 2023, they accounted for 39%, a 56% increase over 2015.

In fact, business tax revenues alone in 2023 ($1.26 billion) were larger than the entire Education Trust Fund in 2015 ($895 million) and nearly as large as the entire 2015 General Fund budget ($1.3 billion).

Opponents of the business tax cuts continue to claim that they resulted in businesses not paying “their fair share.”

In fact, businesses’ share of General and Education Trust Fund revenues rose by 56%, and their share of total general government revenues rose by 40%. Any way you do the numbers, businesses now pay a much larger share of state revenues than before the tax cuts began.

Smaller tax changes

Some smaller tax changes were made during these years, but they are too small to account for this shift in state budget burden from property taxpayers to businesses. 

For example, legislators eliminated the Electricity Consumption Tax in 2017, effective in 2019, and trimmed the Rooms & Meals Tax by half a percentage point in 2019. Legislators also began to phase out the Interest & Dividends tax by reducing the rate from 5% to 4% in 2023, then to 3% in 2024, and to zero in 2025. 

The Electricity Consumption Tax collected roughly $6 million a year before it was eliminated. And Rooms & Meals Tax revenue did not decline, but increased from $341.6 million in FY 2018 to $464.3 million in FY 2024, according to the Department of Revenue Administration 2024 Annual Report. Though Rooms & Meals Tax revenue rose by more than $100 million, its share of state revenues fell from 5% to 3.7% from 2015 to 2024. 

Interest & Dividend Tax revenue fell slightly, from $156.4 million in FY 2022 to $150.6 million in FY 2023, before spiking to $184 million in FY 2024.

These comparatively small changes cannot explain the shift in tax burden toward businesses.

Increasing business activity

The increasing share of state revenues paid by businesses is primarily the result of a booming economy and rising business profits.

The number of businesses in good standing registered with the state increased from 160,000 in 2015 to 188,000 in 2022, the last year for which the Department of Revenue Administration has posted complete data (a 17.5% increase).

The number of businesses filing a return rose by 3,174, or 4.4%, while the number making a business tax payment rose by 5,401, or 12.4%.

These figures indicate that New Hampshire’s growing economy generated increased business formation and business activity. In other words, more businesses made more money, which generated more state revenue.

In short, businesses now pay a significantly larger share of state revenues, while a lower share comes from property tax payers–exactly the result progressives said they wanted to achieve by raising business taxes.

 

Among his many memorable contributions to American arts, the great singer-songwriter Kris Kristofferson, who passed away in September, wrote one of the most quotable lines in rock history.

“Freedom’s just another word for nothing left to lose.”

It’s a fabulous drifter anthem. 

It’s also entirely wrong. 

Part of the American political left at the time was infused with a hippie ethos that disdained possessions and social connections. Freedom to them meant getting “back to the garden,” to quote another anthem of the era. 

They should’ve read fewer radical poets and more Enlightenment philosophers.

Ancient humans had “nothing left to lose” in the sense that they had few possessions. Life was a pretty big thing to lose, though, and life in a state of nature was not exactly full of lattes and free health care. If you were lucky enough to survive childhood, you still had to escape war, pestilence, famine, all the Old Testament stuff.  You were only free until someone more powerful came along and subjugated you. And then there were no U.S. Marines to come to the rescue.  

For most of human history, either chaos or subjugation was the rule for most of humanity. Humans spent millennia poor and unfree. 

The development of democratic governments along with institutions that decentralized power and incentivized innovation and upward mobility changed everything. 

When humans replaced extractive institutions dominated by elites for inclusive institutions that empowered outsiders, as MIT economist Daron Acemoglu concisely frames it, an unprecedented era of human flourishing began.

In 1820, 75% of the world’s population lived in extreme poverty, as the chart below from Our World In Data shows. By 2018, only 11% did. 

“For most of human history, life expectancy has been short – perhaps 25 years for our hunter-gatherer ancestors and only 37 years for residents of England in 1700,” a paper by Harvard, Princeton and UCLA researchers in 2011 determined. “Dramatic changes began in the 18th century, with life expectancy in England rising to 41 years by 1820, 50 years by the early 20th century, and 77 years today.”

In the past 13 years, life expectancy in England has risen to 80.

Economic growth more than tripled human life expectancy and has nearly eradicated extreme poverty.

“Economic growth made it possible to leave the widespread extreme poverty of the past behind,” Oxford University professor Max Roser writes. “It made the difference between a society in which the majority were lacking even the most basic goods and services – food, decent housing and clothes, healthcare, public infrastructure and transport – and a society in which these products are widely available.”

What economist Dierdre McCloskey calls “the great enrichment” was driven by a surge in economic growth, but what drives economic growth? 

Acemoglu notes that short bursts of economic growth have occurred under authoritarian regimes throughout history. But, like the people, they were short-lived. Why?

“Authoritarian systems often rely on some amount of repression, because they seek to maintain an unequal distribution of political power and economic benefits. They also adopt economic institutions and policies that protect incumbents and create rents for those who hold political power,” he wrote in his epilogue to Introduction to Modern Economic Growth.

He found that “a distinguishing feature of growth under authoritarian institutions is that it protects the interests of the current elite. So in the final analysis, growth must always rely on existing techniques and production relationships. It will not unleash the process of creative destruction and the entry of new talent and new businesses necessary to carry a nation to the state of sustained growth.”

The entry of new talent and new business (and new ideas) is crucial for raising living standards and for maximizing individual autonomy (freedom). 

Institutions and policies that seek to protect insiders by suppressing competition, innovation and freedom of individual action hurt economic growth by curtailing freedom and thus limiting opportunity for outsiders. 

Democracy alone does not protect against such collusion by insiders. Even in democratic regimes, special interests pressure ruling authorities for protections against outsiders. 

Such protections remain woven into American and New Hampshire laws even today. 

From tariffs and confiscatory tax rates at the national level to occupational and business regulations at the state level to housing restrictions and food truck bans at the local level, regulation and taxation continue to slow economic growth and reduce opportunities for average folks. 

Building an inclusive, prosperous society requires reducing the barriers that insiders erect to protect their own power and status from being challenged by outsiders. 

When insiders collude with government to extract resources from an unfavored group or to protect favored groups from competition or innovation, freedom, opportunity and prosperity are diminished.

The Josiah Bartlett Center for Public Policy advocates for expanding free markets and limiting government coercion because these are proven methods of maximizing freedom, opportunity and prosperity for all Granite Staters. 

Government maximizes freedom not by redistributing wealth after its creation, but by supporting institutions and policies that lift restraints on individual economic autonomy, thus empowering all citizens regardless of social, political or economic status to pursue happiness on their own terms (providing they don’t harm others). 

Such inclusive institutions maximize individual freedom, incentivize innovation and stimulate growth and prosperity. 

Free markets and limited, inclusive government generate maximum amounts of widely shared prosperity by unleashing the full measure of human potential.

It’s no accident that the “live free or die” state is rated No. 1 in economic freedom in North America and has the nation’s lowest poverty rate. 

It’s no accident that New Hampshire has enjoyed historically higher economic growth than Vermont or Maine, and thus has higher household and per-capita income, despite sharing similar geographic and demographic characteristics. 

Free markets and limited, inclusive government make everyone freer and more prosperous.

Freedom is the foundation of sustainable prosperity.

Or to put it another way, freedom’s just another word for everything to lose.

Lose freedom, and all of our modern prosperity collapses.

Acemoglu documents this collapse in numerous authoritarian regimes of the past. People would win a little freedom, which would cause a spurt of growth, which challenged established elites, who responded by restricting freedom, which ended the growth.

From the Mayans to the Romans to the Soviets, the cycle was repeated.

Lose freedom, lose prosperity.

That’s why the Josiah Bartlett Center fights for policies that expand economic freedom. 

If you’d like to help us raise living standards and create greater opportunities for all Granite Staters, you can make a contribution online here. It’s an investment in a freer, more prosperous New Hampshire for everyone.

It’s election season, and once again progressives are advocating higher taxes by claiming that legislators over the last decade have cut taxes for “big businesses,” “large, out-of-state corporations” and “millionaires and billionaires.” 

These claims are intentionally misleading. They rely on voter ignorance about New Hampshire’s tax system to create the impression that lawmakers in recent years cut taxes only for big businesses and the wealthy. That didn’t happen. In fact, in New Hampshire, that’s unconstitutional.

Unlike the federal government, New Hampshire does not have a progressive personal or corporate income tax system. New Hampshire’s income tax (on interest and dividends) and its corporate taxes are all flat taxes. That is, everyone who pays these taxes pays the same rate.

The New Hampshire Constitution in Section 2 Article 5 mandates “proportional” taxation. Basically, that means that everyone has to pay the same rate. 

Our business taxes and state income tax reflect this constitutional constraint.

Since 2015, legislators have reduced business tax rates. In January the Interest & Dividends Tax ends. All of these cuts were to the flat rates, meaning that they applied to every payer of those taxes, regardless of wealth, equally.

The Business Profits Tax (BPT) rate was reduced from 8.5% in 2015 to 7.5% today. Every business “carrying on business activity in the state” that has at least $103,000 in gross business revenue must pay 7.5% of its profits in taxes to the state. 

Department of Business Administration data show that in 2022, 73.2% of BPT filers paid no tax. Ninety-four percent of BPT filers in 2022 paid less than $100,000 in business profits taxes. To pay $100,000 in BPT would take about $1.33 million in annual profit.

Financial website bankrate.com notes that U.S. small businesses vary in size and revenue, having “a large range depending on the industry, with small businesses generating on average between $1 million (or less) and $41.5 million in annual revenue.”

Though most small businesses have no employees, financial website Motley Fool reports that the ‘average employer small business makes over $6 million a year.”

That might be surprising, but the U.S. Small Business Administration defines a “small business” as one with up to 500 employees.

You might hear that most business tax revenue in New Hampshire is paid by large corporations. But that doesn’t mean they pay a higher rate. They pay the same rate as all other businesses. They account for a large percentage of tax revenue because they’re just so large.

Of the $810.5 million in BPT revenue in 2022, $621.4 million came from companies that paid more than $100,000 in business profits taxes. All of that money was generated by only 1,152 companies. The remaining BPT revenue was paid by 19,146 businesses. And whether they paid $1 or $1 million, they all paid the same 7.5% rate. 

Because more revenue came from larger corporations, progressives claim that the BPT is “paid mostly by large, out-of-state corporations.” In truth, 93% of BPT payers are smaller businesses that pay less than $50,000 in business profits taxes, which means they had profits of less than about $670,000. And 92.9% of BPT tax filers were domestic New Hampshire businesses. Only 7.1 percent were companies based out of state in 2022. 

Those out-of-state companies paid $58.4% of all the business profits taxes collected that year. (How many times do you shop at Target or Walmart?) But they represented a small fraction of all BPT payers. 

The Business Enterprise Tax is a tax on “all compensation paid or accrued, interest paid or accrued, and dividends paid by the business enterprise” after certain deductions are met. It was cut from 0.75% in 2015 to 0.55% in 2024. 

This tax is paid on gross receipts or enterprise value of at least $281,000. Companies that qualify pay this tax even if they have no profits.

Fully 96% of BET payers paid less than $100,000 in 2022. Out-of-state corporations paid 49.7% of BET revenue in 2022, but made up only 7.1% of filers, again showing that the vast majority of companies that paid the tax are New Hampshire companies.

The Interest & Dividends Tax is not a business tax per se, but it is paid by business owners who take dividends from limited liability companies and partnerships. Progressives claim that this tax, which phases out at the end of 2024, is paid by “millionaires and billionaires.” But, again, it’s one rate for all payers. And 73.5% of those who made an I&D Tax filing in 2022 paid less than $1,000.  

The I&D Tax rate in 2022 was 5%. (It is 3% this year, before disappearing in 2025.) That 73.5% of filers includes 14,252 people or entities who owed no tax but had to file. Counting just those who paid the tax, 54% paid less than $1,000.

These figures indicate that this tax is paid primarily by people who aren’t necessarily millionaires. At a 5% rate, someone paying $1,000 in this tax would have a dividend or interest payment of $20,000. That’s what one would earn on $400,000 invested at a 5% rate of return. Surely some of those people are millionaires, but it would be inaccurate to say that the tax is a millionaire’s tax.

Taxing “the rich” means fundamentally changing NH’s tax code

If a politician says she wants to raise taxes only on big businesses or millionaires and billionaires, that can mean one of only three things. 

  1. She doesn’t understand the state’s tax system at all.
  2. She wants to replace New Hampshire’s flat taxes with a new, progressive tax system. 
  3. She wants to keep New Hampshire’s flat taxes but raise the thresholds so that only big corporations and millionaires pay any taxes.

We can probably rule out option three. Progressives who lament the recent tax cuts say the cuts reduced state revenue. They didn’t. State revenue has boomed since 2015, and the last fiscal year brought in record revenue. But eliminating all taxes for the vast majority of business taxpayers and I&D Tax payers certainly would cause a drop in revenues. 

Option one is always a possibility. 

Option three, however, is where reporters and voters should focus. If a candidate for state office says she wants to raise taxes only on the wealthy or large businesses, the obvious question is: how?

New Hampshire’s constitution prohibits taxing people at different rates. Anyone who proposes to raise revenue by taxing only the rich or big businesses must admit one of two possibilities:

  1. They want to raise taxes on all businesses or all qualifying investors;
  2. They want to amend the constitution and create an entirely new progressive tax system with higher rates for higher-income individuals and larger businesses.

Those are the only options, assuming the goal is to raise more revenue.

Reporters and voters really should call candidates and high-profile activists out on this. If they did, it could end, or at least reduce, a lot of the deliberately misleading tax talk that comes up every election season.

The West’s top musical acts all play Los Angeles (population 3.8 million), one of the world’s great concert cities. Legendary singer Van Morrison scheduled his new U.S. tour to start there in October—two nights at the famous Orpheum Theater, Oct. 19th and 20th. But then some guys from New Hampshire called him.

Morrison’s tour schedule had him flying to L.A. from England, where he is set to perform at the 1,700-seat Brighton Dome on Sept. 27th and 28th. The enterprising team behind Jimmy’s on Congress, a hot young jazz club in Portsmouth and one of the best music venues on the Eastern Seaboard (really), spied an opportunity. According to New Hampshire Business Review (NHBR), they reached out to Van Morrison’s team to see if he could stop in Portsmouth for a pair of shows on his way to L.A.

This is a little like the Toledo Mud Hens asking the Los Angeles Dodgers to stop for a three-game series on their way to New York. Van Morrison plays in large theaters that seat thousands. Jimmy’s is a night club that seats 312, mostly at tables and the bar (where the cocktails are great).

It was a plan so crazy it just might work.

The booker at Jimmy’s told NHBR that Van Morrison’s team said he could do it on one condition, NHBR reported. The club had to make some tickets available through Ticketmaster’s dynamic pricing system. 

The old-fashioned way of selling concert tickets is to use a fixed price. That’s the number that used to be printed on paper tickets (remember those?). Anyone who tried to get tickets to hot shows in the 1970s and ‘80s can tell you the problems with that system. You had to go wait in long lines at the venue (or try to get through on the phone), and the top shows would sell out quickly, with no way to find second-hand tickets other than answering a newspaper classified ad that you hoped was real, knowing a guy who knew a guy who knew a guy whose girlfriend couldn’t go that night, or traveling to the venue the night of the show in the hope that someone would sell you a ticket on the street. 

Today’s technology lets anyone anywhere have a chance at buying tickets online, which obviously has its own drawbacks, most notably quick sellouts and sabotage by bots. It also lets venues adjust ticket prices in real time, which is a feature not a bug.

Using dynamic pricing, the most valuable seats for a high-demand show will rise in price until they hit their market clearing value. People outraged by this system think the “actual price” or “true value” of a concert ticket is whatever number the venue decided to offer the tickets for the moment they went on sale. But that number doesn’t mean much.

As we discussed previously, a ticket’s printed price isn’t necessarily the actual market value. It’s usually set somewhat below market value to encourage a sellout. Venues make more money on concessions, so their incentive is to fill the seats. 

With dynamic pricing, tickets start at a certain price, but as in an auction the price can change if more people keep bidding for the same item.

Jimmy’s used dynamic pricing for some of its Van Morrison tickets. The top seats there went for $2,502.50 and $3,102.50 each, plus more than $500 in fees, according to NHBR.

After the show sold out, the predictable complaints about “price gouging” could be heard on local talk radio and on social media. People claimed that Van Morrison finally came to New Hampshire and they were denied tickets because the prices were so high.

Wrong.

Van Morrison came to New Hampshire only because the prices were so high. 

His October 19th show in L.A. sold out immediately. Tickets for the October 20th show range from $183.40 in the back row of the balcony to $344.85 for a restricted-view seat in the second row of the orchestra. Sorry, but you were never going to see him for $100 at a 312-seat club in Portsmouth. To make that small venue work, prices had to be many times higher than for one of his regular shows.

Dynamic pricing didn’t deny Granite Staters a chance to see Van Morrison. It gave Granite Staters a chance to see Van Morrison. Far from being “gouged,” fans were given a once-in-a-lifetime opportunity to see one of the greatest pop singers of the last 60 years at a small club in northern New England. Honestly, that’s amazing.

In the last legislative session, some legislators who don’t understand how prices work tried to ban “ticket scalping.” After this week, you can be sure someone will try to ban “gouging” as well as “scalping” next year. 

All such bans are really efforts to impose by law an economic misconception, which is that “price” is the same as “value.” It isn’t. 

A price set by a vendor might or might not be close to the actual amount of money consumers are willing to pay. When it isn’t, prices adjust up or down depending on the behavior of consumers. 

No one complains when vendors have to slash prices to clear inventory that they priced too high. But somehow it’s supposed to be immoral if vendors, either at the point of sale or in a secondary market, see that the initial price was too low and adjust the numbers up rather than down.

Calling this immoral is nonsense. Trying to ban it is harmful. Everyone would be better off if legislators stayed out of the way and let concert prices sort themselves out in an open and competitive marketplace. Consumers are best served when their preferences are expressed through the market rather than invalidated by government edict. 

Governments only ban what people would otherwise do voluntarily. If people would willingly pay thousands of dollars to have dinner eight feet away from Van Morrison in Portsmouth, as opposed to spending thousands to fly to England or California to see him in a large venue, the government has no business trying to stop them.  

Massachusetts’ millionaires tax makes it harder for the New England Patriots to recruit top players, former Patriots coach Bill Belichick said on Monday.

Asked about the millionaires tax on The Pat McAfee show, Belichick said, “That’s Taxachusetts. They take more from you.”

Because the NFL’s high pay makes most players millionaires these days, the tax implications of playing in Massachusetts are factored into player contract talks, the Patriots legend said.

“Virtually every player, even the practice squad, even the minimum players are pretty close to $1 million,” he said. “Once you hit the $1 million threshold, you pay more state tax in Massachusetts. Just another thing you’ve got to contend with in negotiations up there. It’s not like Tennessee or Florida or Nevada. Some of these teams have no state income tax. You get hit pretty hard on that with the agents.”

How many people can name any of the handful of states that have no income tax? Belichick quickly rattled off the names of three without even thinking about it.

If NFL players, coaches and agents think enough about high taxes to know which states have no income tax, what about other high earners?

For the second year in a row, the Massachusetts Society of Certified Public Accountants has issued a report warning that the millionaires tax is driving high-income professionals out of the state.

“The survey results indicate a concerning trend: a significant number of high-income individuals and businesses are considering or have already relocated out of Massachusetts,” according to the report. “This outmigration coincides with the surge in the number of taxpayers impacted by the surtax.”

More specifically:

“Every individual surveyed said that overall tax policy in the Commonwealth was either the primary reason clients are moving or one of the reasons that clients are considering moving. 55% of those surveyed earlier this year indicated that tax policy was the primary reason for relocating. Nearly everyone surveyed stated that the millionaires tax specifically factored into their client’s decision to relocate, with 64% stating that the tax was one of the reasons that their client is considering moving their domicile and 34% indicating that the tax was the primary reason for relocating.

‘Two-thirds of those surveyed reported that at least one of their clients has already established their domicile away from Massachusetts within the last 12 months. Many high-income residents are seriously considering changing their domicile, with 90% of respondents indicating that their high-income clients are considering moving from Massachusetts in the next year. This has increased by 8% in just one calendar year, from 82% of individuals surveyed in 2023.”

The top states Massachusetts millionaires say they’re eyeing? New Hampshire, Florida and Texas. (Two of the three have NFL teams, by the way. All three have no income tax.)

“Fifty-three percent of accounting professionals say that their clients are considering moving across the border to New Hampshire, suggesting that the tax burden imposed by Massachusetts plays an important part in the decision to relocate — and refuting the claims that individuals are just relocating due to a desire for sunnier weather and more coastline,” according to the CPAs’ report.

High taxes don’t send only millionaires packing. For years, the Tax Foundation has documented the moving habits of Americans and found that there’s a consistent trend of people moving from high-tax to lower-tax states. This year’s report showed that average Americans continue to flee high-tax states for lower-tax ones.

“The U.S. population grew 0.49 percent between July 2022 and July 2023, an increase from the previous year’s 0.37 percent. While international migration contributed to population growth at the national level, interstate migration was the key driver of net population changes at the state level. The U.S. Census Bureau’s most recent interstate migration estimates show that New York lost the greatest share of its population (1.1 percent) to other states between July 2022 and July 2023. Not far behind was California, which lost 0.9 percent of its residents, followed by Hawaii (0.8 percent), Alaska (also 0.8 percent), and Illinois (0.7 percent). At the other end of the spectrum, South Carolina saw the greatest population growth from net domestic inbound migration (1.6 percent), followed by Delaware(1.0 percent) and North Carolina, Tennessee, and Florida (all 0.9 percent).

“This population shift paints a clear picture: Americans are leaving high-tax, high-cost-of-living states in favor of lower-tax, lower-cost alternatives. Of the 32 states whose overall state and local tax burdens per capita were below the national average in 2022, 24 experienced net inbound migration in FY 2023. Meanwhile, of the 18 states and D.C. with tax burdens per capita at or above the national average, 14 of those jurisdictions experienced net outbound migration.

“Though only one component of overall tax burdens, the individual income tax is particularly illustrative here. In the top third of states for population growth attributable to domestic migration, the average combined top marginal state income tax rate is about 3.8 percent. In the bottom third (including D.C.), it’s 3.5 percentage points higher, at about 7.3 percent.”

Supporters of Massachusetts’ millionaires tax boast that it brought in far more revenue than predicted. This means that it’s a net gain for the state, they say. Given that 53% of Massachusetts accounting professionals said their wealthiest clients are considering moving to New Hampshire for its low taxes, it would be to New Hampshire’s short-term advantage for Bay State politicians to continue thinking that this punitive 9% income tax is good for their state. When wealthy people move here to escape high taxes, they tend to vote to keep New Hampshire’s taxes low. They also invest in their new home state, give to its charities and otherwise participate in its economic and civic life.

But in the long run, this misguided tax will hurt New Hampshire too if it slows down the Massachusetts economy. We do better when our neighbors do better. Ultimately, all of New England would benefit were Massachusetts (as well as all of our other high-tax neighbors) to pursue a competitive rather than a punitive tax policy.

 

 

 

 

There’s more that can be done to make New Hampshire a freer state for education entrepreneurs looking to start small, decentralized, and unconventional educational environments, but so far the state is doing better than most.

That’s according to the Education Entrepreneur Freedom Index released by the yes. every kid. foundation

Of 10 possible points that a state could earn, only three states attained the high score of seven. New Hampshire finished with six points, one of only 10 states with at least six or more points in the Index.  

The Index measures the extent to which regulations affect education entrepreneurs in each state, the imagined environment of which is a small, non-religious educational setting with school-age learners from a group of families participating in educational activities for part of the week. 

The Index evaluates each state according to 10 questions that account for the following five regulatory areas: business registration, homeschool laws/regulations, nonpublic school laws/regulations, child care laws/regulations, and occupancy codes. The questions are:

  1. Can the educational environment operate without getting a state business license under state law?
  2. Does the state allow for unlicensed, unregistered, unaccredited, or unapproved non-religious, nonpublic schools?
  3. Does the state allow nonpublic schools to operate without imposing educational requirements on teachers?
  4. Does the state’s homeschool law support or facilitate the operation of the educational environment?
  5. Can the educational environment operate in accordance with the state’s homeschool law without registering?
  6. Does the state allow homeschool instruction without imposing educational requirements on instructors?
  7. Does the state allow child care facilities to operate without imposing educational or qualification requirements on administrators/supervisors/teachers?
  8. Do the state’s child care laws and regulations provide a clear exemption for “Drop In/Open Door” programs?
  9. Do the state’s child care laws and regulations provide a clear exemption for educational programs for school-age children?
  10. Does the state adapt the application of occupancy code requirements in recognition of the existence and needs of small learning environments?

States with more relaxed homeschool and nonpublic school laws/regulations score higher, as entrepreneurs have an easier time getting started in these states. 

Child care regulations represent a near ubiquitous obstacle to alternative learning environments, and occupancy codes are disproportionately burdensome to small learning environments, the authors noted in a presentation upon the study’s release.

Though New Hampshire lost a point for rules requiring state approval for nonpublic schools, the state could become much more friendly to education entrepreneurs, the study’s authors conclude, primarily by relaxing some child care rules and local regulations.

State laws setting strict education and professional qualifications on child care personnel and the absence of clear exemptions for drop-in/open-door programs cost the state two points in the Index. The lack of clear exemptions for small learning environments such as microschools is a problem in New Hampshire. 

Some states, such as Oklahoma, exempt programs consisting of school-age homeschoolers three years of age and older from its child care licensing laws and regulations. 

New Hampshire is marked down on question 10 because of the local zoning and occupancy codes that often represent onerous barriers for aspiring microschools. 

As the Index makes clear, local zoning laws and regulations have emerged as primary roadblocks to the proliferation of microschools across the country with the growing education freedom movement. And the Live Free or Die state, with its especially burdensome web of local exclusionary zoning rules, is no exception. 

One way New Hampshire could improve its score in the Index is to loosen these local zoning restrictions hindering small learning environments. 

While some towns are more lenient than others, often the most daunting hurdle to starting a microschool is finding a permissible location. This is especially true if the microschool founder doesn’t want to operate out of their own home. 

Although homeschooling is only lightly regulated in New Hampshire, those microschools that are more formalized than homeschool co-ops but less formalized than private, nonpublic schools are left in a legal gray area where they’re prohibited from many zoning districts throughout the state because they’re not a permitted use in those areas.

The main reason for that is because education is not allowed by right in New Hampshire.

Recent actions taken by state lawmakers in Utah can offer guidance to legislators in New Hampshire on how to reduce the Granite State’s zoning burden on microschools. 

With just a few words, Utah legislators struck a huge blow to local zoning ordinances impeding the establishment of microschools throughout the state. Senate Bill 13 states, in part, “A charter school, home-based microschool, or micro-education entity shall be considered a permitted use in all zoning districts within a municipality.” 

Signed into law by Gov. Spencer Cox, microschools are now recognized as businesses without any location restrictions in Utah

The bill defines a “home-based microschool” as “an individual or association of individuals that: (i) registers as a business entity in accordance with state and local laws; and (ii) for compensation, provides kindergarten through grade 12 education services to 16 or fewer students from an individual’s residential dwelling, accessory dwelling unit, or residential property.” 

Any alternative/unconventional educational environment that fits this definition could set up shop in any zoning district within any Utah municipality under SB 13. As such, the language in Utah’s bill essentially makes education allowable by right across that entire state. 

Such a path forward is a realistic option for New Hampshire to take to become an even freer haven for education entrepreneurship, and state lawmakers wouldn’t even need to define “microschool” in law to do so. 

Just this past legislative session, New Hampshire state lawmakers did essentially the same thing for home-based child care. House Bill 1567 requires local zoning and planning regulations to allow family or group child care programs as an accessory use (by right) to any primary residential use throughout the state.

The same thing could be done for education, as we recommended in March.

By providing that education is similarly allowed by right in all zoning districts within a municipality (and all nuisance laws still apply), New Hampshire could tear down all local exclusionary zoning laws prohibiting microschool usage across the state in one fell swoop. 



Steeplegate Mall in Concord is coming down. The city granted approval this month for the building’s demolition. 

Yes, the owners of a mostly vacant large building that has become a magnet for crime (181 police calls in the last two years) needed the government’s approval to take it down and replace it with infrastructure people will actually use, like homes and a Costco.

The mall’s been largely empty since 2022. The redevelopment proposal (mixed use, retail and residential) has been moving along relatively quickly, as these things go. There haven’t been the usual disruptive community meetings with protests and long delays to get multiple variances just to replace an eyesore with something the city actually needs and people actually want.

That’s because the city rezoned the mall property years ago. It sits in a Gateway Performance District, which allows multiple uses and is designed to attract development. That’s made all the difference.

The city loosened land use restrictions to encourage economic development, and guess what happened? Economic development. 

Concord officials anticipated that the land where a huge suburban shopping mall sat might one day be put to a different, better use if market conditions changed. Because they had that foresight, a mammoth commercial structure no longer in demand will be converted relatively easily into buildings that are in very high demand.

A lot of the news stories about the mall in the past two years have focused on what Concord is losing. An outdated movie theater, a pickleball club, a community theater. An NHPR story mused about what the evictions from the mall would mean for Concord’s arts scene. 

It takes a stupefying lack of imagination to see a defunct shopping mall and lament what is lost rather than celebrate the possibilities of its transformation. 

Humans, left to their own devices, will build. They’ll create vibrant communities in which entrepreneurs devise ingenious ways of making their fellow citizens happy. Unless government forbids it. 

Governments forbid behaviors for one reason. People would otherwise do the forbidden things.

Hurting people and taking people’s stuff ought to be forbidden. But building a residence beside (or on top of) a store? Building a tiny house on a half-acre lot? Placing your home 46 feet instead of 50 feet away from the curb? These are not behaviors that harm others. 

Yet governments all across New Hampshire ban perfectly reasonable property uses like these. Why? Because some people prefer them. Without a government prohibition, people would build the kinds of mixed-use residential and commercial properties the market demands. And that just can’t be allowed, even in the “live free or die” state.  

Tuscan Village in Salem was once a horse track. When Tuscan Village was proposed, it was illegal. Salem had to change its regulations to make it legal for an entrepreneur to turn an abandoned dog track into a beautiful mixed-use residential and retail village.  

If New Hampshire wants to live up to its motto, it must repeal or relax many of the regulations that make it illegal for entrepreneurs to unleash their creativity. Local governments have to stop worrying so much about preserving the past and let entrepreneurs imagine the future. Preservation has its place. But innovation does too. And right now too many of our development rules are focused on preservation at the expense of innovation.

On housing, a consensus has settled in among Granite State voters. It can be summarized in four main points:

  1. New Hampshire desperately needs more housing.
  2. Local governments should lift regulatory barriers to the construction of new housing.
  3. The state government should act to prompt local regulatory changes.
  4. Multifamily housing is acceptable in suburbs and rural areas.

The St. Anselm College Center for Ethics in Society has polled New Hampshire voters on housing since 2020. The 2024 poll, released this week, shows that voters’ views have solidified into a strongly pro-construction, anti-regulatory, pro multi-family majority. 

A supermajority (75%) agrees with the statement, “my community needs more affordable housing to be built.” 

Roughly 60% (59%-62%) welcome the construction of affordable housing in their own neighborhoods, the relaxation of local land use regulations to allow that construction, the building of multifamily housing in suburban and rural zones, and state intervention to make all of this happen. 

In the 2020 poll, just 28.7% agreed that local governments should relax their planning and zoning regulations to allow the construction of more housing. 

In the spring of 2021, the poll found a 10% increase, to 39%, of voters saying local governments should relax planning and zoning regulations. 

In the fall of 2021, the Josiah Bartlett Center for Public Policy released our landmark study showing that local land use regulations were the primary cause of the state’s housing shortage.

The next year, the percentage of N.H. voters who agreed that local planning and zoning regulations should be relaxed to allow for more housing shot up to 52%. It now stands at 61%.

High-profile conversations about specific policy problems matter. By 2021, Granite Staters were becoming more receptive to the idea that local land use regulations were a problem. A push by the Bartlett Center and others to identify the root cause of the housing shortage and propose solutions helped more people understand the problem and demand the right fix, rather than continue to falsely blame developers or the market.

Today, a strong majority of voters understands the problem and demands that it be fixed. Yet local voters and boards have not gotten the message. 

A few recent examples:

Hampton Falls rejects proposed 88-unit condo project on Route 1

Owner: McIntyre building still a parking lot due to Portsmouth zoning rules

Stratham select board sues town zoning board over 59-unit condo approval

Exeter 120-plus apartment project faces opposition

Portsmouth board rejects plan to raze 1900-era home for four new houses

Board nixes variance for North Newport senior housing project.”

New residential developments are being approved in New Hampshire. But boards continue to reject housing proposals simply because pre-existing regulations don’t allow the type of housing the market now demands. 

In the Hampton Falls and Stratham stories linked above, boards rejected variance requests because members didn’t want to contradict old, outdated rules.

In the Newport example, the rural zone doesn’t allow multifamily housing. Since the developer could conceivably propose a different use for the property than its highest, best, most in-demand use (multifamily housing), the board rejected the proposal. 

Though Granite Staters now say overwhelmingly that they welcome multi-family housing in suburban and rural zones, local boards continue to reject such proposals simply because old rules don’t allow them.

This discrepancy between voter and market demand on one side and inflexible regulations on the other cannot continue indefinitely.

The Center for Ethics in Society polling shows that on questions of housing, large majorities of New Hampshire voters are on the side of developers, not local regulators. And they want the state to act if local governments won’t. 

Voters say housing is the “most important problem facing New Hampshire,” the UNH Survey Center found last month. Thirty-six percent of voters named housing as the state’s top problem. In second place was education, with only 7% of voters naming it the top problem. 

In the most recent legislative session, the House Education Committee dealt with 156 bills. 

The number of bills referred to the Special Committee on Housing? Nine.

Housing beats education as the top concern of voters by 29 percentage points. But legislators, like local land use boards, are operating on outdated beliefs. They’ve yet to adapt to the changing voter preferences. 

But there’s an election this fall, and we’re already seeing candidates campaign on pro-housing agendas. 

Given the firmly solidified pro-housing position of most voters, hardened each month by news of rising home prices, and the slow pace of change at the local level, it would be political malpractice for lawmakers not to make significant regulatory reform a top priority next year.

For years, we’ve predicted exactly this development. The slow pace of change at the local level has voters turning to the state for solutions. So far, legislators have been reluctant to act. That won’t be the case much longer. The pressure to act is too great.

It’s a safe bet that we’ll see a significant increase in legislative proposals to address the housing shortage in 2025. People are tired of waiting for government to get out of the way and let developers solve the housing shortage government created in the first place.