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NH gubernatorial candidate Hemingway favors business flat tax, smaller state government

Senior Political Reporter

July 26. 2014 10:00PM

Gubernatorial candidate Andrew Hemingway listens to a question during an interview in the offices of the New Hampshire Union Leader on Wednesday, July 23. (SHAWNE K. WICKHAM/SUNDAY NEWS)

MANCHESTER - Republican gubernatorial candidate Andrew Hemingway has proposed a business flat tax as a way to boost New Hampshire's economy, but it is also part of his desire to achieve a smaller, more limited state government.

His proposed 2 percent business flat tax would involve eliminating the existing business profits and enterprise taxes and the Medicaid Enhancement Tax. It would also reduce the Interest and Dividends tax from 5 percent to 2.3 percent to spur investment.

His proposed tax would tax "out-going wages, salaries, interests and dividends paid at the business level, ensuring that all consumption is taxed a single time," according to his plan. It would also cover nonprofits, such as hospitals, that currently pay the Medicaid Enhancement Tax.

"It's pretty simple," Hemingway said during an interview with the New Hampshire Sunday News. "It's reducing taxation, and it's reducing regulation."

He said the flat tax, similar to the national flat tax proposed by Steve Forbes, would be revenue neutral.

Such tax reform is one way the governor should think "outside the box" to confront a growth in state government and what Hemingway described as a precarious fiscal environment brought on by state and federal government.

Hemingway, an entrepreneur from Bristol, is running for the Republican nomination in the Sept. 9 primary against Walt Havenstein of Alton, Jonathan Smolin of Alton and Daniel Greene of Pittsfield.

Hemingway, a past chairman of the Republican Liberty Caucus of New Hampshire, is a free-market Republican who questions the role and existence of some state agencies, such as the Public Utilities Commission.

His criticism of Gov. Maggie Hassan, D-Exeter, extended to the Affordable Care Act. A recent federal appeals court ruling against the tax credit subsidies for enrollees in states without their own marketplace exchange, such as New Hampshire, was a signal for the Granite State to take a step back and reassess, according to Hemingway.

"We have now seen 41 modifications to the law, 1,200 waivers and several court rulings against key parts of Obamacare," he said in a statement after the court ruling. "The fact that Governor Hassan is still supporting this disaster and doubling down with her Medicaid expansion is irresponsible at best, political cronyism at worst."

Another appeals court issued a very different ruling on the subsidies, but the uncertainty that exists is harmful for the business community, Hemingway said. He says he hears questions and concerns about the Affordable Care Act every day on the campaign trail.

"What it is more than anything is the uncertainty," he said. "No one actually really knows. With all these court rulings, everyone wonders, what's the next piece that's going to fall? How do we plan for this? More than anything else, a business wants to be able to plan five to 10 years in advance."

Hemingway claims Hassan, who was elected governor in 2012, has put forth no real economic agenda for the state. He called her State of the State speeches "Skittles and rainbows."

Hemingway, 32, lives in Bristol with his wife, Katie, and their two children. He is pro-life, supports medical marijuana and decriminalizing possession of small amounts of marijuana, and believes government should have no role in marriage and would not plan to change anything that is already law in terms of gay marriage.

His current business is Digital Acumen, a technology firm specializing in political communications, as well as "Grassloot," which provides a platform for online donations for candidates, committees and nonprofits.

Hemingway said he is passionate about building businesses and that it is more difficult to do so in New Hampshire than people may realize.

In the interview, he said he knows business partners who went to Nevada and Delaware to avoid high corporate taxes. Asked about the "New Hampshire Advantage," he reflected a minute before commenting.

"The New Hampshire Advantage to me, being born in 1982, is a slogan of a gone-by era," Hemingway said. "It is something which I've heard my dad talk about, and something which I hear older politicians talk about, but it's something which doesn't exist in New Hampshire anymore."

Which is why, he said, now is the time for New Hampshire leaders to take a step back before taking some bigger steps forward, whether that involves tax reform or revising the role of government.

"The time for these small, timid changes is over," Hemingway said. "When you look at the fiscal situation of our state, we need to make some serious changes, and it's going to take a leader who can think outside the box and communicate these things in a way, and can build a consensus, and ultimately that's the challenge. Can we build a consensus around this? And I believe that we can."

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