Jun 22, 2015 6:33 PM
CONCORD - "They are pushing through corporate tax cuts that will blow a significant hole in this budget and budgets into the future."
That’s Governor Maggie Hassan on the warpath about the Legislature cutting the state’s two main taxes on business.
Legislative leaders say the state is losing the battle for new or expanded business to other lower taxed states.
"New Hampshire has lost its advantage," House Speaker Shawn Jasper, R-Hudson. "We used to have that advantage. We really to a large extent have lost that."
Here’s the upshot. N.H.’s business profits tax rate is high, 8.5 percent and with a low-rate business enterprise tax they create the third highest corporate burden in the country.
But with no general income or sales tax our business climate is still seventh best.
The governor’s most controversial argument?
"And only 1 percent of corporations, many of which are large, out-of-state corporations would receive 75 percent of the benefits."
The head of the Business and Industry Association says Hassan’s rhetoric about out-of-state tax cuts is disappointing.
"Those companies employ tens of thousands of people and some of the best-paying jobs and most important economic jobs in New Hampshire," said Jim Roche, president of the Business & Industry Association.
Let’s look who gets the benefit of cutting taxes on corporate profits.
A company with about 10 employees and $50,000 in annual profit, the first tax cut in 2017 is worth only $100.
How about one of those super employers with thousands of workers and $10 million in profit?
That company gets a $100,000 tax cut in the first year.
All companies do pay the second tax on business activity.
But the state Department of Revenue analysis concluded 1 percent of companies pay 48 percent of that tax.