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.
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