SalemNews.com, Salem, MA

Opinion

August 2, 2013

Our view: Taxes drive retail trade over the border

Massachusetts legislators can pat themselves on their backs. Their recent tax hikes on Bay State residents will continue to drive retail dollars over the border to New Hampshire.

Of course, they will tell you this was never their intention. They strongly support Massachusetts retailers, as evidenced by their backing of “sales tax holidays” — for one weekend per year.

Someone needs to explain to this gang the concept of unintended consequences.

The Democratic-controlled Legislature passed a package of tax hikes aimed at funding transportation projects and then overrode Gov. Deval Patrick’s veto — a veto that came only because Patrick wanted a larger tax increase.

Among the increases are a $1 per pack bump in the tax on cigarettes and a 3 cents per gallon boost to the tax on gasoline. Cigarettes and gasoline — two products local residents have shown they are more than willing to travel to New Hampshire to purchase.

Why make the road trip for a carton of cigs and a tank of gas? Because the lower tax rates in New Hampshire can mean substantial savings over the course of a year. The tax on a pack of 20 cigarettes in Massachusetts starting this week will be $3.51, the second-highest rate in the nation after New York’s $4.35 per pack. In New Hampshire, the tax also was increased this year — by 10 cents from $1.68 to $1.78.

Buying her cigarettes in New Hampshire saves Haverhill resident Delis Alexandra $240 per year.

“That’s a lot,” she told reporter John Toole as she shopped at Foods Plus Discount in Plaistow, N.H.

Foods Plus owner Norm Dalphond feels their pain but is happy to have the business.

“It’s unfortunate they have to go up at all,” Dalphond told Toole. “We’ve been hearing about this the last two weeks. Their reaction was they are coming here.”

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