Re: The top marginal income tax rate: 100 years at a glance
I'll educate you here. The Federal Reserve Bank of Boston's Policy arm actually did a good study on this released back in April.
Here's the Cliff's Notes:
1) New Hampshire has had a smaller social safety net for some time - The New England average for people living in poverty is about 12%. In NH it's 7% of the population. This 5% of the population difference is not on Medicaid - or other social services. 40% of New Hampshires total revenue savings compared to New England is due to these circumstances.

2) So the welfare gap is clear, but NH does save in other areas as well. Hospitals are a particular source of savings because of stricter Medicaid eligibility criteria. There is also no public pre-school and until recently there was no public kindergarten. There are also fewer public hospitals (1) (typically public psychiatric hospitals) than other states.

3) New Hampshire takes in 22% less revenue on average than other New England States.

4) NH has higher corporate and property tax rates than comparable states. This partially offsets the lack of sales and income taxes.


5) New Hampshire also has a more diversified revenue stream than other neighboring states. This leads to more consistent state revenues than those states that rely 50% on income taxes.

6) NH also has unique revenue sources. By socializing the sale of liquor, the state is capable of selling it for less than neighboring states and still turn a profit. Moreover, NH games the Medicaid system to milk money from the Federal Government like no other state. Medicaid, remember, is the #1 expenditure in most states. It is, in fact, quite clever what NH does:


In summation, and to be general NH is a 40/40/20 split between good circumstances/unique revenue streams/decreased services.
40: 40% is due to 'favorable circumstances' of low poverty. Much of this might be due to low-income people 'self-selecting' out of the state to a neighboring state with a stronger social safety net, but I've not seen a definitive study on the matter (Sociology/PoliSci grad students - here's a dissertation for you).
40: 40% is due to somewhat unique revenue streams - higher property and corporate taxes, gaming medicaid better than the rest, etc.
20: 20% is due to savings from higher Medicaid eligibility, no preschool, a higher tuition to state funding ratio for state colleges etc.
So there's the breakdown of how they do it. It can be emulated somewhat, but not everywhere. It is a relatively small state that is surrounded by relatively high tax states so business comes in despite the high corporate tax etc.
Originally posted by lektrode
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I'll educate you here. The Federal Reserve Bank of Boston's Policy arm actually did a good study on this released back in April.
Here's the Cliff's Notes:
1) New Hampshire has had a smaller social safety net for some time - The New England average for people living in poverty is about 12%. In NH it's 7% of the population. This 5% of the population difference is not on Medicaid - or other social services. 40% of New Hampshires total revenue savings compared to New England is due to these circumstances.

2) So the welfare gap is clear, but NH does save in other areas as well. Hospitals are a particular source of savings because of stricter Medicaid eligibility criteria. There is also no public pre-school and until recently there was no public kindergarten. There are also fewer public hospitals (1) (typically public psychiatric hospitals) than other states.

3) New Hampshire takes in 22% less revenue on average than other New England States.

4) NH has higher corporate and property tax rates than comparable states. This partially offsets the lack of sales and income taxes.


5) New Hampshire also has a more diversified revenue stream than other neighboring states. This leads to more consistent state revenues than those states that rely 50% on income taxes.

6) NH also has unique revenue sources. By socializing the sale of liquor, the state is capable of selling it for less than neighboring states and still turn a profit. Moreover, NH games the Medicaid system to milk money from the Federal Government like no other state. Medicaid, remember, is the #1 expenditure in most states. It is, in fact, quite clever what NH does:


In summation, and to be general NH is a 40/40/20 split between good circumstances/unique revenue streams/decreased services.
40: 40% is due to 'favorable circumstances' of low poverty. Much of this might be due to low-income people 'self-selecting' out of the state to a neighboring state with a stronger social safety net, but I've not seen a definitive study on the matter (Sociology/PoliSci grad students - here's a dissertation for you).
40: 40% is due to somewhat unique revenue streams - higher property and corporate taxes, gaming medicaid better than the rest, etc.
20: 20% is due to savings from higher Medicaid eligibility, no preschool, a higher tuition to state funding ratio for state colleges etc.
So there's the breakdown of how they do it. It can be emulated somewhat, but not everywhere. It is a relatively small state that is surrounded by relatively high tax states so business comes in despite the high corporate tax etc.



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