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New Hampshire: The Tax Code Other States Envy

You hear it all the time: "New Hampshire has high property taxes." It's the go-to talking point for anyone trying to argue that the Granite State's tax model is broken. But that line only works if you ignore the full picture — and the full picture is what makes New Hampshire the envy of 49 other states.

Start with the big picture. New Hampshire has the second-lowest overall tax burden in the entire country. Only Alaska — which funds its government with oil revenue — is lower. We are the only state in America with neither a sales tax nor an income tax. As of 2025, the Interest & Dividends tax is fully repealed. There is no capital gains tax. No estate tax. No inheritance tax. Business taxes have been cut — the Business Profits Tax dropped from 8.5% to 7.5%, and the Business Enterprise Tax has been reduced alongside it.

Add it all up, and the result is clear: even with high property taxes, the total amount of money government takes from you in New Hampshire is lower than almost anywhere else in America. WalletHub ranks New Hampshire #1 in taxpayer return on investment. You pay less overall, and you get more for it.

Now let's talk about those property taxes honestly. Yes, they are high. In many communities they are painfully high, and that is a real problem for real families. Nobody should dismiss that. People are getting squeezed, and they have every right to be frustrated.

But the question isn't whether property taxes are too high. They are. The question is why — and what the right solution looks like.

The single biggest driver of property taxes in New Hampshire is local school spending. In most towns, education accounts for 60 to 75 percent of the entire property tax bill. School budgets have grown year after year, often far outpacing inflation, driven by expanding administration, rising benefit costs, and a system that has very little incentive to operate efficiently. That's the engine behind high property taxes — not the absence of an income tax.

The important distinction is that property taxes are local. They are set by your town and your school district, not by Concord. Unlike an income tax or a sales tax — which are imposed at the state level by legislators you may never meet — property taxes are at least subject to local accountability. You can attend your school board meetings. You can run for the budget committee. You can advocate for reform in your own community. That's not a perfect system, but it is a system where citizens have real leverage.

Republicans in Concord know this is a problem, and efforts are underway to rein in out-of-control local spending and give property taxpayers real relief — without resorting to a state income tax.

Because an income tax wouldn't solve the problem. It would make it worse. Once an income tax exists, it never goes down. It only ratchets up. And the people setting the rate are insulated from the consequences.

Don't take our word for it. Look at Connecticut. In 1991, Connecticut introduced a state income tax at 1.5%. It was supposed to be temporary. It was supposed to reduce property taxes. Today, that rate is 6.99%. Property taxes are the third-highest in the nation. The state's population is shrinking. People are leaving.

Look at Massachusetts. In 1966, Massachusetts introduced a 3% sales tax — "temporary," they said, with promises of "significant reductions in property taxes." Governor Volpe gave his word. The tax was made permanent the following year. Today it's 6.25%. Massachusetts property taxes are higher than ever. Sound familiar?

This is exactly what Democrats are proposing for New Hampshire right now. The "3-3 Plan" would impose a brand new income tax raising over $2 billion. But they are not proposing to eliminate property taxes. They want to add a new tax on top of the taxes you already pay. If Connecticut and Massachusetts are any guide — and they are — property taxes won't go down. They never do. You'll just be paying both.

New Hampshire's model works precisely because it avoids this trap. By keeping taxation local and refusing to create state-level broad-based taxes, we maintain a system where citizens have real power over what they pay. The result: the lowest poverty rate in America, a booming economy, and a tax burden that is the second-lowest in the nation.

The people who fixate on property taxes in isolation are missing the forest for the trees. New Hampshire has the second-lowest total tax burden in America, the lowest poverty rate, the #1 taxpayer ROI, and a booming economy. We got there by refusing — for 250 years — to hand the state government a blank check through broad-based taxes.

Property taxes need to come down. Republicans are working on it. But the answer is fiscal discipline — not a $2 billion income tax that will sit on top of every dollar you already pay and never, ever go away.