Democratic candidate Joyce Craig and Republican candidate Kelly Ayotte are in the final stretch of their campaign for New Hampshire governor, with taxes emerging as a contentious issue. Craig has criticized the repeal of the interest and dividends tax, portraying it as a handout to the wealthy. She plans to restore the tax and focus on higher earners. Ayotte, on the other hand, has attacked Craig’s stance, suggesting she supports raising taxes.
The interest and dividends tax, which is being phased out and will be eliminated for the 2025 tax year, is a state tax on distributions, dividends, and interest income from investments. Data shows that most Granite Staters do not pay this tax, and it is mainly paid by upper-income taxpayers.
The repeal of the tax was initiated by Republican lawmakers who argued that it unfairly impacts individuals using investments as retirement income. Meanwhile, Democrats believe the tax should be modified to exempt lower-income individuals but not completely repealed.
In the fiscal year 2024, the tax collected $184.3 million, even though it is being phased out. The revenue from the tax is comparable to the annual budgets of state departments. The increase in revenue can be attributed to higher federal interest rates, leading to higher returns on investments.
The gubernatorial candidates have expressed opposing views on the interest and dividends tax, with Craig focusing on restoring it and Ayotte advocating for its repeal. The issue has become a focal point of their campaigns as they aim to win the support of New Hampshire voters.
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