The New Hampshire legislature will debate HB 634 an act which will close a tax loophole in the Interest and Dividends tax. Specifically, it extends the tax to include capital gains, but it also raises the exemption for payment of the tax so that it actually lowers payments to approximately 55,000 residents.
Certain trusts that were exempted from the tax would now have to pay it. Many higher income residents avoid paying this tax because they shelter assets in trusts.
The current exemption for the Interest and Dividends tax is $2400. The new law would raise that to $5000 for individuals and $10,000 for couples. This results in a significant tax break for many middle income wage earners. By closing the trust loop hole and extending the tax to capital gains, the measure would raise an additional $100 million annually for the state.
The legislation, however, shares this money with municipalities through local revenue sharing. That means property tax reductions for taxpayers. Property tax relief through fair taxation and closing loopholes is supported by NEA-NH.
Too often the move in Concord has been to reduce money for school districts and municipalities. This creates undo pressure on citizens to make unwise cuts to district and municipal budgets.
The closing of one loophole which allows major corporations offshore to avoid paying New Hampshire taxes could raise an estimated $23 million for New Hampshire’s taxpayers. It is tough to argue this bill will stifle economic growth here when money that could be used to create jobs is parked in overseas banks by large corporations.
It is not often legislators can do so much good and provide tax fairness at the same time. We urge you to contact your Representatives and Senators and tell them to vote for HB 634.