Next week, New Hampshire voters will decide who gets to run for governor this November. And despite the fact that most states would envy our 5.4 percent unemployment rate, jobs and the economy are the issues driving the primary elections. StateImpact lays out the similarities–and differences–between the plans of the leading GOP candidates.
Q: How are Kevin Smith and Ovide Lamontagne’s proposals alike?
A: They’re both going the traditional conservative Republican route of cutting business taxes in some way, in the hope that it draws more enterprise into the state. Which they say would import more jobs. And they would off-set that drop in tax revenue from businesses at first by making budget cuts. The idea is that it doesn’t put more money into the state coffers immediately. But over time, as the number of tax-paying businesses increases, revenues will increase even though taxes were actually cut. You just have more people paying into the system.
Q: As Republicans, we would expect them both to think along similar lines. How are they different?
You can divide their differences on jobs and the economy—business tax reform, basically—into two categories. How much they’d cut taxes, and their thoughts on tax credits. Among other things, A: Kevin Smith is calling for a 3.5 percent reduction in the Business Profits Tax over seven years. Right now it’s at eight-and-a-half-percent. Ovide Lamontagne is calling for a smaller reduction of a half-percent reduction over two years.
On the tax credit side is where they really differ.
Q: What is Ovide Lamontagne proposing for tax credits?
A: He says he would introduce two new key credits for the Business Enterprise Tax. You could go pretty deep into this one, but this is basically a tax large employers pay on their workers’ wages. Under his plan, businesses in the manufacturing sector would be eligible. So the more factories hire, the lower their tax burden gets. The other big thing he would do is push for a dollar-for-dollar BET offset credit for employers who helped pay workers’ student loans. So if a business had one hundred workers with student debt and paid $500 a year on each person’s loan, that’s effectively $50,000 less they owe toward the BET.
Q: What does Kevin Smith propose for business?
A: He’s actively pushing against adding new tax credits. He’s arguing for streamlining the tax code and just broadly cutting business taxes. I contacted his campaign, and they explained it as not wanting government to pick winners and losers through the tax code. They also cited a Wall Street Journal article which reported that a lot of businesses don’t bother with the hassle of applying for these credits. It’s just too much paperwork. Interestingly, though, his campaign also told me he believes it’s important to offer “strategic incentives” to draw businesses into the state beyond the old-school New Hampshire Advantage mantra of no income or sales tax. What exactly that means is unclear, because at the same time, he’s said he’s not for offering tax breaks or other incentives to specific companies or industries.. But he is arguing for some sort of a more aggressive approach toward companies that want to expand, or poaching big employers from out-of-state.
Tomorrow we’ll take a closer look at the proposals of Democratic candidates Maggie Hassan and Jackie Cilley.
Ed. Note: In an earlier version of this story, we reported that Kevin Smith is calling for a three percent reduction in the Business Profits Tax over seven years. The correct figure is 3.5 percent. We regret the error.