January 5, 2008
Romney Raised Taxes on NH Commuters
Soon after becoming Massachusetts governor, Willard Mitt Romney retroactively imposed new taxes on non-residents, including Granite State citizens who work, conduct business, and/or invest in the Bay State. Romney’s higher taxes reached into New Hampshire and helped vacuum at least $95 million in marginal income back across the border.
According to Massachusetts Department of Revenue figures, the total amount that New Hampshire taxpayers surrendered to Massachusetts grew from $213.6 million in 2002 to $248.9 million in 2006, a 16.5 percent increase. (Data for 2006 are preliminary.)
Had 2002’s tax baseline remained flat, New Hampshire taxpayers would have kept $95 million in cumulative payments to Massachusetts since 2003. Higher revenues often are a supply-side effect of tax cuts. This is not so when taxes increase.
Massachusetts tax revenues from New Hampshire residents increased even as the number of New Hampshire residents who paid Massachusetts taxes fell 2.3 percent — from 89,304 in 2002 to 87,320 in 2006. The checks shrank in number, but swelled in value. The average tax payment from New Hampshire expanded $458 — from $2,392 in 2002 to $2,850 in 2006 — up 19.2 percent.
“That’s even more remarkable when you consider that the number of New Hampshire taxpayers who pay (as opposed to simply file) didn’t change in what appears to be any statistically significant way during this period, yet the average tax payment went up substantially,” says Cato Institute scholar Stephen Slivinski.
These higher payments perfectly coincide with legislation Romney signed on March 5, 2003, retroactive to that Jan. 1. Under Romney’s law, “gross income derived from. . . any trade or business, including any employment,” would be taxable, “regardless of the taxpayer’s residence or domicile in the year it is received.”
These rules now cover “gain from the sale of a business or of an interest in a business, distributive share income, separation, sick or vacation pay, deferred compensation and [state-taxable] nonqualified pension income.” On Aug. 9, 2004 Romney also taxed non-residents’ shares of income from real-estate partnerships.
“Romney created these taxes new,” says Robert Roughsedge, a Hampton attorney who works in Boston. “He taxed more people and companies than before. This is what a dying state must do to keep the tax base. This is not a pro-growth, Reagan-type answer to the problem. . . . Romney chose to tax the people who left, increase the people outside of the state subject to taxation, and probably remove the incentive to leave by increasing the cost.”
“This research confirms what I said when Mitt Romney started attacking Rudy Giuliani on the commuter-tax issue in New York,” says former Republican Massachusetts Gov. Paul Cellucci, who supports Giuliani.
“That was an existing tax. Mayor Giuliani had other priorities in terms of tax cutting. He provided broad-based tax relief for New York residents and businesses, something Mitt Romney could not do in Massachusetts. It’s ironic that Mayor Giuliani did not raise taxes on commuters, yet he gets criticized by a guy who did raise taxes on commuters, in particular people in New Hampshire who work in Massachusetts.”
Had Romney’s spokesmen commented, as requested, they might have observed that he sped a $275 million capital gains tax rebate, scored property-tax relief for seniors and secured a two-day, tax-free shopping holiday.
Nonetheless, Merrimack’s Bob Bevill, chairman of the conservative New Hampshire Eagle Forum, is among those who condemn Romney for $283 million in business “loophole closures” and $501.5 million in increased fees on marriage licenses, gun registrations, gasoline deliveries, property-deed certificates, and more.
“New Hampshire taxpayers should be concerned that Mr. Romney will continue his semantically challenged shell-game of raising taxes, through increased users fees and special tariffs, while publicly stating that he has not raised taxes,” Bevill says. “A vote for Romney is a vote for higher taxes — no matter what they are called.”
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New York commentator Deroy Murdock is a media fellow with the Hoover Institution on War, Revolution and Peace at Stanford University.
http://race42008.com/2008/01/05/romney-raised-taxes-on-nh-commuters/trackback/
January 5th, 2008 at 12:36 pm
Edit: Sigh…-KWN
January 5th, 2008 at 12:38 pm
Romney is done.
Republicans had better seriously decide who can save us from Obama or we are all done.
January 5th, 2008 at 12:39 pm
RayinNH whats your problem?
January 5th, 2008 at 12:42 pm
It’s looking like Huckabee is going to be left unscathed for the next week as Rudy-Romney-McCain pull out the knives on each other.
January 5th, 2008 at 12:44 pm
Any taxes that Romney raised are supposed to be called “fees!”
That way he can claim he never raised taxes.
January 5th, 2008 at 12:52 pm
What a shocker! Mitt Romney collected taxes on out-of-state workers using Massachusetts infrastructure and government services while working in Massachusetts. Unless I’m missing something, I don’t see what the big deal is. Sounds like more grasping at straws.
January 5th, 2008 at 12:52 pm
My apologies Kavon. What I said was out of place and inappropriate. I apologize for bringing that sort of tone to your site.
I’m just fed up with Deroy articles being posted here. It would be one thing if he was an actual contributor on this site who would discuss his posts with us. Instead, we just his articles and have to take them at face value. I would much rather have something like this posted by someone who would actually debate the issue instead of posting and then running and hiding.
January 5th, 2008 at 12:52 pm
Mayor Giuliani Said That The Commuter Tax Should Be Increased Rather Than Eliminated. “Earlier today, Mr. Giuliani assailed the Legislature for seeking to end the commuter tax, saying that if anything, it should be higher.” (Clifford J. Levy, “Leaders In Albany Plan To Eliminate Tax On Commuters,” The New York Times, 5/13/99)
Mayor Giuliani Threatened Politicians Who Considered Voting For The Tax Cut. “At the City Hall event, Giuliani also warned Assembly Speaker Sheldon Silver (D-Manhattan) and any other city-elected backers of the tax cut: ‘Voting against the interests of the city, somehow, some way, you will pay for it.’” (Dan Janison, “Former Foes United,” [New York] Newsday, 5/17/99)
January 5th, 2008 at 12:53 pm
It’s understandable that Romney supporters would be annoyed given the profanity laced childish stunt Aron pulled last night. Aron really put a bad face on Rudy supporters and I’m glad Kavon sanitized what Aron wrote.
January 5th, 2008 at 12:55 pm
By 1999, More Than 750,000 Non-City Resident Commuters Were Paying The Commuter Tax. “The 33-year-old tax on more than 750,000 non-city residents who commute to jobs in the city rakes in $360 million a year for the Big Apple, when payments by New Yorkers and out-of-staters are counted.” (Gregg Birnbaum, et al. “Shel-Shocked Pataki Will Get Tax-Kill Bill Next Week,” New York Post, 5/20/99)
Mayor Giuliani Justified The Tax As “Modest.” “‘Sometimes, the game of politics gets out of control,’ Giuliani said. ‘This is a very modest tax.’” (Dan Janison, “Former Foes United,” [New York] Newsday, 5/17/99)
Mayor Giuliani Said That The City Government Was “Very Much Entitled To This Very Small Tax.” “‘The city should not feel that it’s doing anybody a favor here,’ Mr. Giuliani said. ‘We are very much entitled to this very small tax.’” (Clifford J. Levy, “Legislature Acts Quickly To Repeal Commuter Tax,” The New York Times, 5/18/99)
- Mayor Giuliani Administration Official: “We Want To Retain That Money.” “‘We are going into this lawsuit in a very optimistic fashion,’ said Michael D. Hess, the city’s Corporation Counsel, who joined Mr. Giuliani in an afternoon news conference at City Hall. ‘We want to retain that money for the good uses that the city will put it to.’” (Abby Goodnough, “Giuliani Files Lawsuit Challenging Tax Repeal,” The New York Times, 6/3/99)
Mayor Giuliani Said That Suburbanites “Should Feel An Obligation” To Pay The Tax. “On his weekly WABC radio show, Giuliani said that suburbanites ’should feel an obligation to make a contribution to the city that is doing a lot for them.’” (Robert Hardt Jr., “Albany Tax Slash Has City Weighing Layoffs,” New York Post, 5/22/99)
Mayor Giuliani Immediately Threatened Legal Action In Order To Keep The Commuter Tax. “A spokeswoman for Mr. Giuliani said tonight that he would file suit to retain the tax, maintaining that the state cannot end it without the permission of the city.” (Clifford J. Levy, “Leaders In Albany Plan To Eliminate Tax On Commuters,” The New York Times, 5/13/99)
- Mayor Giuliani: “We Will Challenge It. We Will Go To Court And We Will Win.” (Gregg Birnbaum, “Rudy Goes To War With Albany,” New York Post, 5/14/99)
January 5th, 2008 at 12:57 pm
The difference between the commuter tax and Romney collecting taxes on out-of-state workers is that Giuliani’s tax punishes people for coming into the city to work, in addition to New York State income tax that the state collects for out-of-state workers.
January 5th, 2008 at 12:59 pm
Mayor Giuliani Filed A Lawsuit Challenging The State’s Authority To Repeal The Tax. “Mayor Rudolph Giuliani and City Council Speaker Peter Vallone joined forces and filed a lawsuit yesterday to challenge the Legislature’s repeal of the city’s commuter tax, insisting the measure was unconstitutional… The suit argues the Legislature passed the measure too quickly and did not receive city permission in what’s called a Home Rule message.” (Liz Willen, “City Sues Over Tax Repeal,” [New York] Newsday, 6/3/99)
The State Supreme Court Rejected Mayor Giuliani’s Argument And Ruled The Entire Tax Unconstitutional. “A Manhattan judge on Friday, in effect, rewrote the state law repealing the New York City commuter tax, an action which authorities said could cost the city more than $360 million a year. Supreme Court Justice Barry Cozier said the law, which repealed the payroll tax only for state residents but left it intact for out-of-state commuters, was unconstitutional. His ruling means the tax is eliminated for all commuters… Cozier agreed with lawyers for New Jersey, Connecticut and two private individuals that the new tax law, scheduled to take effect July 1, violates several provisions of the U.S. Constitution. The plaintiffs had argued that taxing some commuters and not others was unfair to those who still would be forced to pay. The judge rejected the city’s argument that the law is special legislation requiring a so-called home-rule message before any change is made. A home-rule message is a request from the city to the state to alter a law affecting city affairs.” (”Judge Eliminates Commuter Tax,” [New York] Newsday, 6/26/99)
The Giuliani Administration Vowed To Appeal The Ruling. “City officials said the court ruling would be appealed.” (”Judge Eliminates Commuter Tax,” [New York] Newsday, 6/26/99)
The New York Court Of Appeals Rejected Mayor Giuliani’s Appeal. “Deepening a financial blow to New York City, the state’s highest court said yesterday that state lawmakers acted within their authority last year when they repealed a city tax on commuters and that the ‘discriminatory’ income tax still levied on out-of-state commuters must also be ended. That means out-of-state commuters will be reimbursed for the city tax they’ve paid retroactive to July 1 of last year, when the repeal for in-state commuters took effect. The city had collected the 0.45 percent tax since 1966.” (Kara Blond, “Court Of Appeals Kill City’s Commuter Tax,” [New York] Newsday, 4/5/00)
January 5th, 2008 at 1:02 pm
Argamenon - what are you doing? Today is pile on Mitt day, not pile on Rudy day. Geesh - please do a better job reading through this morning’s talking points.
January 5th, 2008 at 1:03 pm
“It’s understandable that Romney supporters would be annoyed given the profanity laced childish stunt Aron pulled last night. Aron really put a bad face on Rudy supporters and I’m glad Kavon sanitized what Aron wrote.”
Wow. I guessed I missed something.
January 5th, 2008 at 1:04 pm
“What a shocker! Mitt Romney collected taxes on out-of-state workers using Massachusetts infrastructure and government services while working in Massachusetts. Unless I’m missing something, I don’t see what the big deal is.”
So is the Romney camp now on the record that he raised taxes?
January 5th, 2008 at 1:12 pm
The tax makes sense and NYC did it too.
Romney’s constituents were the citizens of MA, and Giuliani’s the citizens of NYC. If a Governor or Mayor can tax other then their own constituents, who are making use of their State and City, so much the better.
Who remembers that hypocrite Romney went after Giuliani on this very issue.
January 5th, 2008 at 1:36 pm
Another day, another piece of garbage from Deroy
January 5th, 2008 at 2:46 pm
What fees did Romney hike on varmint guns?
January 5th, 2008 at 6:40 pm
OMG! I bet the Club for Growth just crapped their pants.
January 6th, 2008 at 11:48 pm
[...] unknown wrote an interesting post today onHere’s a quick excerptSoon after becoming Massachusetts governor, Willard Mitt Romney retroactively imposed new taxes on non-residents, including Granite State citizens who work, conduct business, and/or invest in the Bay State. Romney’s higher taxes reached … [...]