Shaheen’s Endorsement of Craig’s Income Tax Proposal: A Controversial Political Move in New Hampshire
U.S. Senator Jeanne Shaheen’s endorsement of fellow Democrat Joyce Craig’s plan for an income tax on interest and dividends has reignited discussions around taxation in the Granite State. This proposal is becoming a focal point of Craig’s campaign for governor, drawing the ire and skepticism of several Republican figures who see it as a politically risky throwback to Shaheen’s own turbulent history with tax policy.
The Context of the Proposal
On a recent episode of Jack Heath’s radio show, Shaheen was questioned about Craig’s income tax plan. Heath pointed out that discussing a new tax in a state famously known for its lack of both an income and sales tax seems counterintuitive—especially given New Hampshire’s reputation as a tax-sensitive state. In response, Shaheen acknowledged that “nobody in New Hampshire likes taxes.” However, she argued that if the state intends to adequately fund essential services such as education, infrastructure, and healthcare, then some form of revenue generation is necessary.
The details of Craig’s income tax plan remain unclear. Although she has signaled a willingness to implement this tax, it notably lacks a full-fledged presentation on her campaign website. Shaheen mentioned that Craig likely intends to target the state’s wealthier residents rather than the average retiree reliant on fixed incomes from Social Security and minor asset returns.
Public Reactions and Concerns
The political ramifications of Shaheen’s endorsement cannot be underestimated. Critics, particularly from the Republican camp, have pointed out the irony of her support for a tax increase after her own failed efforts during her 2002 Senate campaign. Greg Moore, the Regional Director for Americans For Prosperity, tweeted about the potential political repercussions, reminding voters that Shaheen’s previous endorsement of a tax hike cost her a Senate seat.
Historically, Shaheen’s approach to taxation has fluctuated. She signed a no-new-taxes pledge during her successful gubernatorial campaign runs in the late 1990s but deviated in her 2002 Senate bid by advocating for a sales tax and a capital gains income tax. This pivot did not just lead to her losing the election but also branded her with the moniker “Jeanne Shaheen, Taxing Machine.” As she backs another tax initiative, some politicians see a circular path leading back to her controversial past.
Craig’s Tax Plan: Details and Implications
Joyce Craig, the current mayor of Manchester, acknowledged her support for reinstating the income tax during a recent debate. She aims to raise approximately $80 million in new tax revenues, and while she has expressed openness to adjusting the current exemption threshold, specific details regarding her income tax plan are yet to be fully articulated.
According to data from the New Hampshire Department of Revenue Administration in 2021, of the 71,259 tax returns reporting interest and dividend income, a significant 61% paid $500 or less in taxes. This reflects that most taxpayers were not significantly burdened under the previous tax system, which Craig assures would not adversely affect average retirees.
However, the lack of clarity around Craig’s intentions has led to wariness among voters. Furthermore, the fact that New Hampshire’s interest and dividend income tax is set to be completely phased out by January 1, 2025 complicates the practicality and popularity of such a proposal.
Political Backlash and Economic Arguments
As critics rally against Craig’s tax proposal, Governor Chris Sununu’s brother, John E. Sununu, has positioned the Republican stance against such measures as a commitment to fiscal conservatism. Sununu and other Republican leaders argue that New Hampshire does not need a new income tax to support its educational and infrastructural needs, citing record heights in state revenues since cutting business tax rates in 2015.
Drew Cline of the Josiah Bartlett Center for Public Policy noted that state revenues have soared in recent years, suggesting that an income tax may be unnecessary for funding essential services.
Craig’s declining to sign a no-new-taxes pledge—contrary to both Shaheen and her current Republican opponent—further complicates her campaign narrative. This has left critics to assert that the Democratic candidate may lean closer to a tax-and-spend philosophy than voters are comfortable with.
Conclusion
As the gubernatorial race in New Hampshire continues, the interplay between tax philosophy, historical precedent, and current fiscal realities will undoubtedly shape the electorate’s decision-making process. Shaheen’s endorsement of Craig’s income tax plan may galvanize some Democratic supporters, but it also risks alienating a significant segment of New Hampshire’s population that staunchly values the state’s tax-free status. As Craig attempts to define her tax strategy against a backdrop of economic growth and rising public expectations, the political stakes are undeniably high for both her and Shaheen.
