Why are Massachusetts and New Hampshire so different?
Massachusetts is known as the most liberal state in the union. It produced Michael Dukakis, Ted Kennedy, and John Kerry. If you ask my dad, it’s because Massachusetts is filled with moonbats. In other words, it’s got a very liberal culture. New Hampshire, on the other hand, is known as the most libertarian state in the union. The Free State Project is targeting New Hampshire based on its relatively small tax burden and a “culture of individual responsibility.” There is a lot of fear that as an increasing number of Massachusetts residents move north, they will change the culture of New Hampshire and it will become more politically liberal like Massachusetts. Using culture to explain the political differences between Massachusetts and New Hampshire is popular, but does it really stand up to scrutiny? Massachusetts has a history of electing Republicans to the corner office while the recent election of Republican Scott Brown has caused many people to rethink their perception of Massachusetts of extremely liberal. New Hampshire is not dominated by either party.
Culture may be an important factor, but I don’t think that it is the primary factor. If we channel Monica Prasad for a moment, some obvious factors comes to mind.
The first is tax structure. What kind of taxes do we see in MA and NH? Massachusetts (or “Taxachusetts”) relies primarily on broad-based regressive taxes, such as a personal income tax and a sales tax, which spread the burden over a wide section of society. Alternatively, New Hampshire taxes, such as the property tax, corporate income tax, and tolls, are much more concentrated and visible. The state has no sales or personal income taxes. This has several implications for the way state actors are constrained in their policy decisions.
Cognitively, personal income and sales taxes fly under the radar of employees and consumers. The regressive 5.3% personal income tax automatically comes out of your check each week and the same percentage comes out whether you make $20,000 or $200,000. There is no sense among voters that politicians are “soaking the rich.” As for the sales tax, most people automatically compute it into their purchase decisions. Again, it is regressive in that the burden falls disproportionately on middle and lower income individuals who have a “higher propensity to spend.” There isn’t really a “redistribution” effect to these taxes.
Property taxes and tolls are both collected yearly or at the point of use. Along with corporate income taxes, they all target a concentrated group: property owners, drivers, and corporations. This actually creates an adversarial system where the majority tries to get as much as they can out of a minority group. Of course, as Mancur Olsen has taught us, smaller groups are much more able to form organizations to protect their interests. For example, the most successful anti-tax initiative in Massachusetts was Proposition 2 1/2 which limits property tax hikes.
The other major difference is the remuneration and number of legislators. Being a Massachusetts legislator is a fulltime job with excellent pay and even better health benefits. New Hampshire legislators get something like $100 per year and gas money. Additionally, despite having a significantly smaller population than Massachusetts, New Hampshire has more than twice the number of legislators. This makes rent-seeking a lot tougher.
From this perspective, state structure plays a much underappreciated role. While my dad’s moonbat thesis is interesting, I’m just not sure how well it stands up to a comparative analysis!
- Josh McCabe
Good post, but technically Massachusetts legislators are “part-time.”
I would say causally it’s not the political culture (see the bountiful comparative work on the subject) which determines our perceptions of NH and MA ideology, but instead the historical realities, which also cause the political realities. I take perhaps a more primordial view. If you look at the types of people who settled communities in each state, they were very different. Massachusetts, settled by community minded puritans, retains it’s “tithing” culture (though they’ve lost the religion side of it). New Hampshire was always more of a commercial hub, inhabited by the merchant classes. The politics of today are a result of the societal aspects that began their development in each geographic space over three hundred years ago.
A couple things: I wouldn’t read into MA and Dukakis too much, it was his home state. Reagan won MA in 1984 and 1980. Eisenhower won the state in 1956 and 1952. Obviously, 1924 and previous, MA was a solidly Republican.
John: Yes, technically it is part-time work. $60,000 per year plus benefits part-time work.
Patrick: Your path dependence point is well taken, but I’m not sure how much cultural continuity there is especially given how much immigration Massachusetts has seen historically. Think about how those dirty mangy Irish mucked things up for the Puritan yankees! The Irish really transformed political culture in Massachusetts. New Hampshire, on the other hand, has seen very few immigrants (minus Massachusetts moonbats moving north!).
I’d have to go back and do some more research on where their respective state instutitions came from. I think I smell a research paper!
I need you to flesh out how the passage of Prop. 2 1/2 is an example of smaller groups being more effective at protecting their interests when anyone who owned a home, and comprising what could describe a large group, would have had a stake in seeing their property taxes lowered. Was it a small group of property owners who delivered the majority of votes for its passage? Help us out here.
Dan: The number of property owners is smaller relative to the total number of residents in the state and they also have a more concentrated interest in property taxes. You’re going to have free riders in both cases, but fewer if the group is smaller and has more in common (so maybe there’s a correlation between group size and homogeneity I’m overlooking).