Profiles in disappointment

As you can see elsewhere on these opinion pages, the surreptitious decision last June to impose the state’s 5 percent interest and dividends tax on distributions from limited liability companies has caused the kind of firestorm that keeps politicians up at night.Whether you are for or against the change, the lawmakers who decided it was a good idea to quietly insert such a controversial measure into the state budget, late at night, behind closed doors, have proven yet again that many, if not most, of our elected leaders have a severe deficiency in common sense, forthrightness and the fortitude to defend their decisions. This is true not only in Concord, but in Washington – but that’s another matter for another day.The “LLC tax,” as it has become known, has rightly riled up those involved in LLCs — whether or not they would be affected by the tax (and, as it has been said many times over, some 95 percent of LLCs won’t be affected). Their fear is that the tax is a tax on their income, and they raise the specter that they’re just the canary in the coal mine on the way to a full-blown state income tax.The core of the problem actually is that, for generations, New Hampshire residents and businesses have been fed an unrelenting course of baloney by people who claim the state doesn’t tax income.The fact is, New Hampshire already has a variety of income taxes – the business profits tax taxes the income of companies, the business enterprise tax likewise is a thinly veiled tax on payrolls, and the interest and dividends tax itself is a thoroughly undisguised tax on the income of retired people and others whose earnings come from their investments.Reality, unfortunately, has had little to do with New Hampshire’s ongoing obsession with an artificial self-image as a state with no income tax and – just as artificial – one with low taxes. (Just ask folks who live in a town with a crumbling or insufficient tax base how their property tax bills are doing.)We’ve said this before, and we’ll say it again: The issue is not what New Hampshire is taxing, it’s how it’s taxing. It is simply wrong to tax the income of some entities and individuals and not others. It is simply wrong to tax the very same house in one town three, four or five times as much as the very same house in another.Until and if New Hampshire’s elected leaders – and we, the voters – face up to that reality, we will continue to endure unacceptable budget crises at the state and local level and a continued deterioration in even the most basic governmental services we as a state should expect. And we’ll continue to endure misguided attempts to add yet another nickel-and-dime solution to our dismal patchwork of taxes, fees and federal charity known as New Hampshire’s revenue structure.