New Hampshire Economy

The Bureau of Economic Analysis estimates that New Hampshire's total state product in 2003 was $49 billion. Per capita personal income in 2005 was $37,835, 6th in the nation and 110 percent of the national average, $34,495. Its agricultural outputs are dairy products, nursery stock, cattle, apples, and eggs. Its industrial outputs are machinery, electric equipment, rubber and plastic products, and tourism.[citation needed]

New Hampshire experienced a significant shift in its economic base during the last century. Historically, the base was comprised of the traditional New England manufactures of textiles, shoe-making, and small machining shops drawing upon low-wage labor from nearby small farms and from parts of Quebec. Today, these sectors contribute only 2% for textiles, 2% for leather goods, and 9% for machining of the state's total manufacturing dollar value (Source: U.S. Economic Census for 1997, Manufacturing, New Hampshire). They experienced a sharp decline due to obsolete plants and the lure of cheaper wages in the South.

The state has no general sales tax, no personal income tax (the state does tax, at a 5 percent rate, income from dividends and interest) and the legislature has exercised fiscal restraint, thereby attracting commuters, light industry, specialty horticulture, retail customers and service firms from other jurisdictions with higher tax policies, notably from neighboring Massachusetts, Vermont and Maine (and to a lesser extent, New York). Efforts to diversify the state's general economy have been ongoing.

Additionally, New Hampshire's lack of a broad-based tax system (aside from the controversial state-wide property tax) has resulted in the state's local communities having some of the nation's highest property taxes. Overall, New Hampshire remains ranked 49th among states in combined average state and local tax burden.[7] Nevertheless, ongoing efforts from unhappy homeowners for property tax relief continues. They have argued that residents of Massachusetts and other neighboring states are shopping in New Hampshire tax-free, and New Hampshire homeowners are paying them for the privilege. See tax-free shopping.