When Government is Small: New Hampshire Shows the Way

It has become an article of faith among some that a large government is necessary to run a modern and prosperous society. New Hampshire should give pause to those who believe that argument.

Consider this anecdote: In 1995, my family and I were buying tickets for the summer cable car ride up Cannon Mountain in New Hampshire. I was surprised to see that the cashier was using a vintage Kaypro, circa 1984, computer. I was curious why the park was using such an “antique.” The cashier explained that they were basically using the machine to keep track of the number of tickets sold, and they didn’t need anything more.

With that spirit of putting the taxpayer first, New Hampshire’s government functions quite well without a state income tax or sales tax. New Hampshire’s residents have the second lowest tax burden as a percentage of income in the United States.

If you are a big government advocate, you may be thinking that surely New Hampshire citizens are poor, receive little in the way of services, and their children suffer with poor schools.

On the contrary, consider these facts. New Hampshire has the seventh highest per capita income in the United States. As for schools, according to a federal government study released this fall, “New Hampshire’s students outpace the national average in both math and reading, ranking near the top of the country across the board.”

Part of New Hampshire’s uniqueness stems from its true grassroots representative democracy. Even though New Hampshire is a small state (it ranks 41st in population), New Hampshire’s House of Representatives is the third-largest parliamentary body in the English speaking world. Only the U.S. Congress and Britain’s Parliament are larger.

Astonishingly, the annual salary for a N.H. representative is $200. As to perks, each member basically receives a seat and a coat hanger rather than a large staff and office. Serving in the N.H. state house is not a career move toward power and wealth.

As a consequence, a representative cross-section of men and women serves in the state house: “businesspeople, homemakers, educators, engineers, doctors, lawyers, students and retirees.” In this atmosphere, the taxpayer comes before special interest legislation and taxes remain low.

Where does your state rank on tax burden and per capita income? The complete numbers for all states are at http://money.cnn.com/galleries/2007/pf/0704/gallery.tax_friendliest/8.html


3 Responses to When Government is Small: New Hampshire Shows the Way

  1. NH says:

    Awesome Barry! Someone recently posted on a Washington Post blog article that NH was 49th in education and it was because we were all dumb hayseeds up here voting for constitutionalists for president.

  2. The economy of Washington D.C. is of course highly dependent on bloated federal spending. Not many area residents like the idea of limiting government. It is not surprising that some of them would rely on name calling instead of a viewpoint.

  3. Ian says:

    Passage of the FairTax Act would help put the entire country on a more fiscally-sound basis. The income tax, and the tax code, offer our federal representatives great opportunity to hide taxes in prices by taxing the income and payroll of business.

    Renown economist Laurence Kotlikoff believes that failure to enact the FairTax – choosing instead to try to “flatten” what he deems to be a non-flattenable income tax system – will eventuate into an irrevocable economic meltdown ( http://snipurl.com/meltdowninprogress ) because of the hidden aspects of the current system that make political accountability impossible. Tom Frey, of the DiVinci Institute, foresees the coming collapse of the income tax system ( http://snipurl.com/incometaxcollapse ).

    Here is why the FairTax MUST replace the income tax. It’s:

    • SIMPLE, easy to understand
    • EFFICIENT, inexpensive to comply with and doesn’t cause less-than-optimal business decisions for tax minimization purposes
    • FAIR, loophole free and everyone pays their share
    • LOW TAX RATE, achieved by broad base with no exclusions
    • PREDICTABLE, doesn’t change, so financial planning is possible
    • UNINTRUSIVE, doesn’t intrude into our personal affairs or limit our liberty
    • VISIBLE, not hidden from the public in tax-inflated prices or otherwise
    • PRODUCTIVE, rewards, rather than penalizes, work and productivity

    The income tax system must ultimately fail, if for no other reason than that Washington politicians cannot seem to wean themselves from being “sucked down the spending hole” while seeking ways to hide the magnitude of taxation from those who ultimately pay for all of it – every working American. It’s well past time to scrap the tax code ( http://snipr.com/scrapthecode ) and pay for government the way that America’s working men and women are paid – when something is sold.

    (Permission is granted to reproduce, in whole or part. – Ian)

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