Business is booming: Cutting tax rates worked
July 13. 2017 1:12AM
New Hampshire’s monthly revenue reports are a mirror in which both sides of the aisle see a reflection of their own beliefs.
As Dave Solomon reported in his State House Dome column on Sunday, New Hampshire ended the two-year budget cycle $166 million ahead of the revenue forecasts built into the budget two years ago.
Democrats will remind us that they said revenue estimates were too low, and that this excess revenue could have been spent. But they also warned us that cutting business tax rates for the first time in 20 years would “blow a hole in the budget.” They had their bases covered.
Republicans will point to the robust revenues as evidence that cutting business taxes has worked. The lower rates can’t get all the credit for increased economic activity across New Hampshire. But it does prove that state government can pare back business tax rates without gutting the treasury.
This current budget includes another round of rate cuts, which will leave the punishing Business Enterprise Tax at 0.50 percent, down from 0.75 percent two years ago. That’s a 33 percent cut in a tax on payrolls of businesses large and small.
Cutting the BET not only makes New Hampshire a more attractive place to start a business. It makes it easier for existing businesses to hire more workers.
Business tax rates are an important piece of New Hampshire’s economic development puzzle.