This week the Republican controlled State Senate chose to put business profits ahead of working families, by voting to cut taxes for big business.
The New Hampshire Fiscal Policy Institute reported, “SB 1, which would lower the business profits tax (BPT) rate, and SB 2, which would lower the business enterprise tax (BET) rate, together likely would reduce state revenue by nearly $80 million on a biennial basis once fully phased in.”
That’s right boys and girls, the GOP wants to slash $80 million dollars from our budget and give that all to big business. $80 million dollars is a lot of money. That would build a lot of bridges, pave a lot of roads, repair a lot of schools, and employee a lot of people.
“These business tax cuts will not create jobs or boost the economy, but instead will drain millions of dollars out of the state budget each year,” said Jeff McLynch, executive director of the New Hampshire Fiscal Policy Institute.
The Union Leader reported, “(Democrats) noted only 1 percent of the businesses in the state pay 76 percent of the business profits tax, meaning large out-of-state corporations produce the bulk of the revenue. ‘This is a giveaway to large, out-of-state corporations,’ said Sen. David Pierce, D-Hanover. ‘It puts the interests of large, out-of-state corporations ahead of the needs of the people of New Hampshire and ahead of the needs of the state’s small businesses.’”
“Senate Republicans are so obsessed with implementing the Koch Brothers agenda of more tax giveaways for big businesses that they’re willing to blow a $78 million hole in the budget and make middle class families and small businesses pay the price,” said Raymond Buckley, Chair of the NH Democratic Party.
Cutting taxes is the mantra of the Republican Party. Cut taxes for businesses and voila` economic prosperity and budgets overflowing with tax revenues. It is the cure all for everything! Cut taxes and more businesses will move here then with the additional revenue we can build whatever we need. We need new bridges, cut taxes. We cannot pay our bills this year, then cut taxes!
This trickle down theory of economics has failed so many times I have lost count. President Reagan, hero to the current Republican Party, drove our nation into debt with tax giveaways like this. The President George W. Bush doubled down on Reagan’s policies and cut taxes during wartime, leading to the worst financial meltdown since the Great Depression.
(Image Gage Skidmore Flikr CC)
More recently, Governor Sam Brownback of Kansas put this theory into action when he signed “one of the largest tax cut bills in Kansas history.”
“Since the tax cuts took effect at the beginning of 2013, Kansas has added jobs at a pace modestly slower than the country as a whole. The earnings and incomes of Kansans have performed slightly worse than the U.S. as a whole as well.” (Read more here.)
It worked so well that Kansas has had their credit rating downgraded. Standard and Poor’s lowered the state’s credit rating, because of theses tax cuts.
“The downgrades reflect our view of a structurally unbalanced budget, following state income tax cuts that have not been matched with offsetting ongoing expenditure cuts in the fiscal 2015 budget,” said Standard & Poor’s credit analyst David Hitchcock in a release.
Yet even after the downgrade, Gov. Brownback believes that cutting taxes is the way to grow your economy. “We need jobs and we have proven the way to that is through lower taxes,” Brownback told the press.
However others have outright rejected the idea that lowering business taxes and keeping the minimum wage low will attract new business to the state.
Minnesota took a very different approach. They raised taxes on the wealthy and raised their minimum wage.
“Every Minnesotan will pay more under this tax bill, and unfortunately it’s going to harm Minnesota’s economy and hurt job growth in the state,” said House Minority Leader Kurt Daudt, R-Crown.
The thing is that Minority Leader Kurt was absolutely wrong! This week it was reported that due to the progressive agenda of the Governor and the Legislature, Minnesota is expecting to have a $2 billion dollar surplus!
“Minnesota’s State Economist Laura Kalambokidis said rising wages and lower gas prices mean more money for consumers and thus more taxes for the state. Meanwhile, the state will save more than $100 million over the next two years because there will be fewer than expected students in poverty and with special needs, as well as fewer students overall.”
Minnesota Governor Mark Dayton plans to use the additional money by investing in schools, implementing a fully funded Pre-K program, and to conduct some much needed infrastructure repairs.
I guess we need to ask ourselves, what type of New Hampshire do we want? Do we want a state that gets downgraded, has sluggish job growth, and stagnant wages? If so, then we should definitely cut taxes for these large corporations.
Or, do we want a state that is rebuilding our failing roads and bridges, investing and expanding public education, and building a strong and thriving economy? That’s the New Hampshire I want, and cutting taxes is the wrong approach.
Cutting taxes is not the magic solution to every problem. Someone once said, you can tell me what you value, however, me your budget and I will tell you what you truly value.
If we enact these tax cut for large corporations, who are we really helping? Big Business or real Granite Staters.