Politics of New Hampshire
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New Hampshire has had an unusual tax base over the years. Unlike most states, there is no sales or income tax. Like most states, it has been forced by the courts to equalize taxes for uniform support of schools in all areas of the state.
Taxation controversies 
There is continual opposition to "broad-based" taxes. Their absence is not absolute; there is an 9% sales tax on rentals (vehicles and rooms) and meals, and a 5% income tax on dividends and interest; moreover, the state's 8.5% Business Enterprise Tax is essentially an income tax on sole proprietors and any normal business entities. However, candidates for legislature and Governor are routinely asked to take "The Pledge" against broad-based taxes.
The property tax is the source of nearly all municipal revenue. It is "broad-based" (affecting even renters, indirectly) but does not attract the same controversy because municipal expenditures are voted locally, typically by Town Meeting, in which every voter can participate.
In 2002, in response to court-ordered statewide equalization of education funding (see the Claremont Decision), New Hampshire instituted a statewide property tax. The tax is lower than the amount already assessed by municipalities, it is collected by municipalities, and is basically returned to them, though legislative adjustments create "donor towns" and "recipient towns." Each new legislature has considered changes to the distribution formula.
Taxes that are not "broad-based" (that is, that residents could avoid paying) have not aroused comparable controversy. For example, the meals and rentals tax disproportionately impacts tourists and visitors who do not vote. Recent legislatures have covered increased spending with increases in sin taxes, tolls, and filing fees. Some feel it would be simpler and fairer to enact a broad-based tax; in 2008, various Town Meetings considered citizen petitions against "The Pledge." In particular, the property tax is seen as unfairly impacting the poor and especially retirees. Advocates of a state broad-based tax say it would permit higher state payments to municipalities, enabling them to lower property taxes. The opposing argument is that municipalities set their tax levels to find a balance between local anti-tax and pro-services forces; a new state tax would not change this balance but would eventually lead to more state spending.
Libertarian tendencies 
New Hampshire has several libertarian tendencies. New Hampshire perennially provides popular resistance to proposed seat-belt and motorcycle-helmet laws. Automobile insurance is optional under normal circumstances.
The state motto of "Live Free or Die" is another political touchstone. In 2006, when welcome signs at the border began to display the marketing slogan, "You're Going to Love It Here," a firestorm erupted and Governor John Lynch acceded to a privately financed effort to erect new signs bearing the state motto. In 1997, a comparable firestorm had greeted a new issue of car license plates on which the motto was printed rather than embossed; the design was promptly changed to increase the size of the motto. (However, the U.S. Supreme Court ruled in Wooley v. Maynard (1977) that those who object to the motto may tape over or cover up the words, either partially or completely.)
The Free State Project 
Right-libertarian tendencies 
New Hampshire has right-libertarian tendencies. For example, the REAL ID Act was passed in response to the wave of aliens entering the U.S. illegally. It tightened standards for driver's licenses, mandated that states capture biometric data, and called for data sharing among states and internationally. Senator Judd Gregg included an earmark in the Act to compensate New Hampshire for being the first state to implement the Act. In 2007, however, New Hampshire overwhelmingly enacted a law calling the Act "contrary and repugnant to" the state and federal Bill of Rights and prohibiting the state executive branch from implementing it.
Other effects 
New Hampshire's right-libertarian reputation has also induced contiguous Amesbury and Salisbury, Massachusetts, and not-nearly-contiguous Killington, Vermont in 2004 and 2005, to petition to become part of New Hampshire. This reflected local discontent with restrictions on liberty or profitability, rather than any expectation that their own states plus the U.S. Congress would grant the necessary permission.
See also 
- RSA 78-A
- RSA 77. Until 1995, the income tax exempted dividends and interest from institutions within the state (and, reciprocally, from institutions in Vermont). This was found to violate the Privileges and Immunities Clause of the U.S. Constitution.
- RSA 77-A
- New Hampshire Motor Vehicle Insurance Questions & Answers
- Wooley v. Maynard, 430 U.S. 705 (1977). The Slate blog discusses the issues at Poetic Licenses
- "Free State Project: State Vote Results"
- The vote on HB-685 was 24-0 in the Senate and 268-9 in the House.
- RSA 243:1, Prohibition against Participation in a National Identification System.
- A nearly identical bill, SCR-8 of 2006, did not pass the legislature (tabled 14-9 in the Senate).
- "CNN.com - Killington residents vote to secede from Vermont - Mar. 4, 2004".[dead link]