New Hampshire lawmakers missed a chance to reduce economic inequality while closing the state's $190 million budget deficit. The NH House and Senate have passed a budget that rejects both a tax on capital gains and a state estate tax.
Read more in this editorial from the Concord Monitor.
"The Obama administration received plenty of attention in the past few days for pushing legislation that would require public companies to run their top executive pay packages by shareholders each year. [...] When President Obama finally signs this bill, he'll have some energetic watchdogs in Boston to thank for its success."
Dear NH supporter of United for a Fair Economy,
New Hampshire faces a clear choice between a budget with revenue from progressive taxes paid by the very wealthy, OR revenue from gambling. It’s time to let your lawmakers know what you want.
The NH Senate budget fills the deficit with revenue from gambling and a suspension of a business tax credit. The NH House budget contains a new capital gains tax and an estate tax on estates larger than $2 million – both taxes would be paid primarily by very wealthy people. Now the final version of the budget will be decided in a House-Senate conference committee, followed by a vote in the House and Senate. The legislature has to pass a final budget by the end of June.
UFE believes progressive taxation – people paying taxes based on their ability to pay – is fundamental to a fair society, a healthy economy, and true democracy. Your Senator, Representative and Governor Lynch need to hear from you that paying for the budget in a fair way is something you care about. When the legislature is making major funding cuts in needed social programs because of budget deficits, the estate tax can help your state meet its obligations to those who have nowhere else to turn.
Please call and email your legislators now; phone calls are more effective. For additional information regarding the NH estate tax, see former NH State Representative, Michael Marsh’s, NH Estate Tax Fact Sheet.
HOW TO TAKE ACTION:
Click here to find contact information for your Senator and Representative, or call (603) 271-2111 to be connected to your Senator.
Send your message to the entire House of Representatives at either of the following addresses:
Write a letter to your local newspaper. If your letter gets published, send a copy to your legislators and to UFE.
Forward this email to friends, family and colleagues in NH who may want to take action.
After taking action, let me know what you find out by sending me an email at email@example.com.
Thanks for taking action to promote a fair economy,
Estate Tax Policy Coordinator
United for a Fair Economy
Support the NH Capital Gains and Estate Tax AmendmentsBy Michael Marsh
A century of Republican control of our state legislature has left New Hampshire with the seventh most regressive tax system in the country. Working people pay four times as much of their income in state and local taxes here than the wealthiest New Hampshire residents. This did not happen by accident, but because previous legislatures consistently voted to increase those taxes that affected working people. The Housebudget includes two provisions that will reverse this policy; the Senate budget does not.
The first provision is a change to our estate tax law, which was in place for 70 years before it was effectively eliminated by Congress under President Bush in 2001. The change puts an 8% tax on estates larger than $2 million (or $4 million for a couple if they havedone estate planning). This will affect only the wealthiest New Hampshire estates – barely 100 people per year. Here are a few facts about the change:
- The estate tax limits the further concentration of wealth in this state and will help rebuild a strong middle class.
- The estate tax will not affect 99% of the estates in New Hampshire. Every penny will be paid by individuals with at least $2 million in assets or couples with $4 million.
- The tax protects surviving spouses because an estate transferred to a spouse is tax-free.
- These changes to our estate tax will make our tax system more just. It is not fair that a working person pays state taxes every time he goes to a fast-food restaurant for lunch but a wealthy individual who inherits an estate worth millions pays nothing at all.
- The tax is modest – for a couple with a $5 million estate, the effective tax rate is less than 2%.
- The tax follows the current federal estate tax rules which include important exceptions that protect family farms and small businesses.
- The tax encourages giving to charities because all charitable gifts are tax deductible.
The second important tax provision in the budget is an expansion to our current Interest and Dividends tax. Today we have a 5% state tax on most forms of unearned income, including interest, dividends, and taxable annuities. This tax raised $117 million last year. The budgetextends this tax to include the largest source of unearned income: capital gains. Capital gains are the profits on the sale of assets like stocks, businesses, and real estate. The expansion will also allow usto finally increase the exemption for interest and dividends, reducingthe tax on the fixed-income poor who depend on CD’s and savingsaccounts. In a good year, the capital gains tax could bring in $150 million or more in new revenues. Even in today’s economy, the revenue will be at least $50 million per year. Here are some facts about the capital gains tax:
- Who will pay this tax? Overwhelmingly, it will be paid by wealthy New Hampshire residents. In 2006, the last year the IRS has complete data, more than 92% of the capital gains tax would have been paid by people making more than $200,000 per year, and less than 1% of it would be paid by people making under $100,000.
- If you are a middle class tax payer, your federal income tax rate is 25%. If you are a wealthy person with a long-term capital gain of any size whatsoever – even millions of dollars – your tax rate is 15%. It is simply not fair that people should pay higher taxes on income earned from working than they do on unearned income. At the minimum, they should be taxed the same. The capital gains tax provision in the budget will start to make these tax rates more even.
- Capital gains on the sale of a primary residence are protected. There is a $250,000 exemption ($500,000 for a couple), and only gains above this amount are taxable.
- The bill reduces the tax on small savers because it more than doubles the amount of interest and dividends income that is exempt from tax, from the current $2,400 per person to $5,000 (or $10,000 for a couple).
- For the great majority of working class and middle class people in this state, the changes to the Interest and Dividends tax in the budget will decrease the amount of tax they pay.
The federal estate tax is up for renewal this year, and some of America's richest families have campaigned behind the scenes against the only tax on wealth in our country. While permanent repeal is off the table, the terms of the estate tax are yet to be determined.
Read more in this editorial from the Concord Monitor.
As upper-income residents of Connecticut who treasure the quality of life in our state, we believe that Governor Rell's proposed budget cuts unnecessarily limit the State’s ability to maintain public structures and human services that are vital to keeping Connecticut strong and vibrant.
Low-income and moderate-income families have already borne the brunt of the economic downturn in Connecticut. In the last recession, Connecticut residents lost jobs sooner and recovered at a slower rate than the nation as a whole. Unemployment is already higher now than it was at the peak of the last recession in 2003 (7.1% compared to 5.7%). Meanwhile, the wealthiest fifth of Connecticut residents have seen a 45% increase in average real income since the late 1980s, while the poorest fifth have seen a drop in their real income. State public service workers have already made $700 million in concessions, yet further cuts to the public services on which our residents are now relying in greater numbers are still being proposed.
Inequality in our state is growing, despite the fact that CT has the highest per capita income in the US. As upper-income taxpayers, we are not carrying our share of the load. The top 1% of Connecticut families pay 4.5% of their income to state and local taxes, while those in the lowest 20% pay 12.1%.
Part of the solution to the budget crisis lies in asking those with more resources to pay higher marginal rates. Progressive tax brackets are being used in many of Connecticut’s neighboring states and are an important means for establishing fairer, more reliable state revenue.
During times of economic hardship, we must all make sacrifices to support the common good. Those of us who have incomes of $200,000 and above can well afford an increase in our income tax. Instead of placing an even greater burden on communities and families already suffering from the economic crisis, we need to develop a balanced solution that will save the much-needed public services that benefit us all.
In this way, we can and should avoid severe cuts to our great state's services and continue to invest in our people and our communities. As upper-income Connecticut State taxpayers, we are willing and able to share in the solution to our state's budget crisis.
"It’s been almost eight months since the financial crisis became a reality. It’s also six months since the election of President Obama, who made a campaign promise to rebuild the economy from the bottom up. But now, 100 days into his administration, we’re not much closer to a bottom-up economy. In fairness, such a major restructuring will require much more than 100 days. It will also require major involvement from the grassroots folks who helped get Obama elected."
Read the full article by UFE staffer Steve Schnapp in The Register Citizen.
Under the law passed by President Bush, there is no estate tax in 2010, and estates pay only capital gains tax; then the estate tax returns with a $1 million exemption in 2011. President Obama wants to prevent this one year gap by making the 2009 estate tax law permanent. There are several proposals on the table, including Rep. Jim McDermott's, D-WA Sensible Estate Tax Act, HR 2023, which will provide $62 billion more in revenue over 10 years compared to President Obama's proposal. We expect that Congress will vote later this year on legislation to make permanent changes in the estate tax. You can read what Rep. McDermott says in support of his bill in this 5/21/09 PBS news transcript:
"Reviving the Economy" - Congressional Difference of Opinion - Congressman Jim McDermott, D-WA
By Joel Wendland
"President Barack Obama campaigned on and has already implemented the
largest tax cut for working families in US history. As part of the
president's economic stimulus package, beginning on April 1st, the
Treasury Department revised its rules to make sure that 95 percent of
workers will keep an extra $400 and working-class households will keep
$800 per year.
In addition, the president has proposed shifting more of the tax burden to the very richest Americans and corporations by eliminating the Bush tax cuts for the upper bracket and by ending loopholes that allow corporations to gain at the expense of middle-income taxpayers."
Read the full article at Political Affairs.
By Desiree Evans of The Institute for Southern Studies.
"A movement aimed at shifting the nation's tax policy by raising taxes for the wealthiest is taking off across the country. Such a shift in policy would mean reversing 30 years worth of federal tax and budget policy that has primarily favored the rich.
Improving tax policy was a large part of President Barack Obama's campaign program. Although he's implemented one of the largest tax cuts for working families in U.S. history, economic justice advocates say that Obama's tax proposals must do more."
Read the full article at Facing South.