NH Public Policy
New Hampshire Center for Public Policy Studies

Union Leader - Tax plan analyzed: 89% of NH would save

Nearly 9 in 10 Granite State tax filers would receive a tax cut in 2019 under the GOP plan expected to pass Congress this week, according to one group’s analysis.

The average tax cut for New Hampshire residents works out to $2,900, but varies greatly based on income.

The poorest 20 percent — those with yearly incomes of less than $34,100 — would average a $310 tax savings, while the richest 1 percent — those with incomes of more than $580,520 — would see a $59,180 cut, according to the Institute on Taxation and Economic Policy (ITEP), a nonpartisan research organization that analyzes the effects of tax policies.

A greater percentage of Granite State filers (89 percent) would receive a tax cut than the national average (84 percent), according to Steve Wamhoff, senior fellow for federal tax policy at ITEP.

“But remember, those numbers change dramatically in later years,” Wamhoff said.

In 2027, 67 percent of New Hampshire taxpayers would see a tax cut and 30 percent would get a hike, closely mirroring the national numbers, he said.

The 2027 analysis compared how much someone would pay that year under current tax law versus how much they would pay under the GOP plan, he said.

Last year, the median household income in New Hampshire stood at $76,230, but a household could have multiple people filing individual tax returns.

According to ITEP, for those tax filers with incomes between $54,170 and $83,420, the average cut would be $1,230. About 8 percent in that range would see a tax hike, with another 2.4 percent staying tax-neutral.

Income is the amount before any taxes are taken out from wages and from items such as interest and dividends, Wamhoff said. But many factors can come into play to determine a family’s ultimate tax burden.

“So much is dependent on their particular circumstances,” said Steven Burke, a tax attorney at the McLane Middleton, Professional Association in Manchester.

Greg Bird, an economist with the New Hampshire Center for Public Policy Studies, last month co-wrote a New Hampshire perspective on federal income and estate taxes but didn’t conduct an analysis of the bill’s final version.

“The effects of each proposal on individual households will depend on specific circumstances and may vary significantly — even for households with similar incomes,” Bird co-wrote.

This week, Bird said the final version will affect “the vast majority of residents in some way.”

Bird’s report showed the bottom 31 percent of the income distribution paid 1 percent of total federal income taxes paid by Granite Staters in 2015.

The top 21 percent of income distribution paid 77 percent of all federal income taxes while the top 1 percent paid 28 percent.

New Hampshire federal income tax returns showed Granite Staters paid $7 billion in federal income tax in 2015.