For the first time since the general election campaign began, Democratic candidate for governor Joyce Craig spoke directly about the details of her proposal to bring back the income tax on interest and dividends.
During the Greater Manchester Chamber of Commerce debate Thursday, Craig and her GOP opponent Kelly Ayotte were asked about the tax by moderator Scott Spradling.
“We know the two of you differ in opinion about the interest and dividends tax being repealed in January of 2025,” Spradling said. “Can you explain your perspective on this tax cut and the overall plan or pledge for Granite Staters, as far as your philosophy on taxes?”
Craig gave her now-familiar answer.
“I do not support a sales or an income tax and would veto anything if it came across my desk,” Craig said. “I do not support a tax break for the most wealthy in our state, like Kelly Ayotte. What that is going to do is increase property taxes for our hard-working families.”
That is how Craig has talked about the income tax on interest and dividends taxes in the past, with a reference to a “tax break for the wealthy” and avoiding any reference to her own tax plan.
Ayotte called her out.
“This is not a ‘tax break,’ this is an income tax, and it’s the reinstatement of a tax that the legislature and the governor have already decided should end,” Kelly said. “And you know why? Because it’s a tax on retirees’ income. And we have many retirees in the state. And it’s a tax on those saving for retirement.”
Later in the debate, Ayotte added: “Perhaps she’s missed it, but there are a lot of retirees who aren’t going to be so happy when she wants to increase their taxes.”
That last remark inspired Craig to do something she had never done before: Acknowledge that she is proposing a tax increase and addressing its details.
“I’d like to clarify one thing, because I’m open to increasing the threshold and looking at the top 1 percent and that’s $80 million [in revenue],” Craig said.
For there to be a “threshold” on taxable income and $80 million in tax revenue, there has to be an “income tax.”
Realizing what she had done, Craig struggled to get through the rest of her answer without explicitly admitting she was talking about a tax hike.
“So we are not going to make sure, but my, my focus will be, not tax, not to give a major tax giveaway to multi-millionaires in our state, including Kelly Ayotte,” Craig stammered.
Her Republican challenger pounced.
“Excuse me, what does ‘open’ mean? Open means, ‘Hold on to your wallet,’ folks, because that is so nonspecific. If I were a retiree, I would not want to take that as, ‘This is my tax plan and this is what I can expect,’” Ayotte said.
Currently, the rate is three percent and is paid by any New Hampshire resident whose gross interest and dividends income from all sources exceeds $2,400 annually ($4,800 for joint filers).
What Craig did not address, and she has not posted her plan on her website or discussed it in public, is what her tax rate on interest and dividend income would be, or the exemption level on taxable income she’s proposing.
NHJournal has repeatedly asked Craig for the details of her plan, but the former Manchester mayor has declined to respond.
Whatever her income tax plan, Republicans say Granite State voters will reject it.
“I’m glad to see Democrats being clear about their intentions to take our money, and I fully expect to see the voters flip a giant middle finger to Joyce Craig’s income tax on Nov. 5,” said House Majority Leader Jason Osborne (R-Auburn.)
“Mayor Craig says the quiet part out loud. She supports an income tax,” said Bedford Republican activist Craig Stevens. “Income taxes always grow – thresholds get lower – soon everyone’s paying. This is why we need to support the entire Republican slate.”
Daniel McGuire of Granite State Taxpayers echoed the concern that the exemption level Craig might support today could be different in the future.
“Craig’s caveat of raising the tax threshold is a common trick played to try to gain a constituency for a tax increase by telling voters, ‘We’re not taxing you, just those rich guys over there.’ The problem, as Maryland, California, Massachusetts, and others have discovered, is that singling out productive people who can easily decamp to Florida or Texas is not a good strategy for long-term economic well-being. Not only can they remove themselves from New Hampshire, but they take their businesses with them,” McGuire said.
