Candidates Push Not-So-Hot Tax Issue

Taxes are a burning issue here--if you’re a Republican presidential candidate. But for most state residents, the dueling tax-cut plans promoted by the top GOP contenders hardly seem to have caught fire.

If not fully a thing of the past, the rabid anti-tax fervor that once defined the Live Free or Die state is definitely in remission. Even as the candidates have focused on the tax issue, state GOP leaders worry that their presidential aspirants are out of sync with the vast majority of New Hampshire voters.

“Maybe [the candidates] are just a little behind the times,” Republican state Sen. Mary Brown said. “Right now, we have a booming economy and people really are not so worried about their pocketbooks.”

Texas Gov. George W. Bush touts a sweeping plan that would slash income tax rates, provide a tax break for many married couples and phase out the inheritance tax.

Then there is Mr. Flat Tax, Steve Forbes, who after spotlighting abortion in Iowa now stresses his call for an across-the-board 17% tax rate. He is not to be confused with Mr. No Tax, Alan L. Keyes, who simply wants to junk the income tax and replace it with a national sales tax.

Sen. John McCain of Arizona has struck a more moderate stance, emphasizing that the growing federal surplus is best used to retire the national debt and shore up Social Security and Medicare. But he still has his own tax-cut plan on the table, one he argues would mostly benefit moderate- and low-income people.

Meanwhile, town meetings around the state are dominated with questions about everything except taxes, Smith observed. “The idea that all we care about is taxes is just an out-of-date argument,” she said.

Once this country’s cradle of rugged--make that downright crotchety--individualism, New Hampshire in recent years has become a mirror of a less feisty, more affluent America. In 10 years, the population has grown by 6%. Empty factories have turned into office spaces for a flourishing high-tech industry.

The transformation has forced New Hampshire legislators to rethink their bitter, long-standing opposition to either state income taxes or sales taxes. Despite having the nation’s highest property taxes, the revenue has not proved substantial enough to salvage a sagging state educational system. Last year, in an unprecedented move, the state House and Senate passed separate measures to institute a state income tax. But they failed to settle on a single measure, and Gov. Jeanne Shaheen, a Democrat, threatened to veto the bill even if they did.

But Democratic state party chair Kathleen Sullivan said Shaheen’s position, growing out of a campaign pledge she had taken, ran counter to public opinion. “People know, if you want services, you have to do something about” the state’s tax policy, Sullivan said.

Steve Duprey, the state GOP chair, agrees that interest in the tax issue has declined. “Is it the most important issue in New Hampshire? I don’t think so,” he said.

Still, Duprey warned against ignoring the issue. “In New Hampshire, if you don’t talk about taxes, you’re leaving out a fundamental plank.”

Indeed, it is the pockets of anti-tax sentiment that keep an organization such as the Granite State Taxpayers Assn. in business. And a poll released this week by the University of New Hampshire showed that for Republican primary voters, taxes are in fact an issue. Poll director Andy Smith said 21% of those surveyed cited taxes as their main concern, against 15% for the economy, 14% for health care, 12% for Social Security and 11% for morality.

Among Democrats in the poll, health care topped the agenda, at 33%. Education followed at 20% and Social Security, 15%.

Smith attributed the findings among GOP voters in part to the emphasis some of the candidates have placed on the tax-cut issue. “I don’t think there’s much else to pay attention to,” he said. “It’s kind of an issueless campaign. People are just not worried about anything.”

He added that in a survey three months ago, taxes barely merited a mention among Republican voters. Then Bush, in particular, started hammering home the tax-cut issue.

“I think the shouting is causing the response,” Smith said.

Jon Greenberg, senior editor at New Hampshire’s public radio station, said many of the Republican candidates have failed to recognize the state’s changed political landscape. “People here aren’t growing up in a government-hating atmosphere any more,” he said. “A lot of what people thought of as hatred of taxation was actually hatred of government. That venom is beginning to be diluted. . . . “

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Times staff writer T. Christian Miller contributed to this story.