Letters to the editor

Mon, May 19 2008

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New business taxes put state at disadvantage

To the editor:

The editorial in the May 11 edition concerning Massachusetts lawmakers' insatiable appetite for more business taxes was right on the money. Far from "corporate loophole closings" this bill represents a fundamental change to the way businesses are taxed in this Commonwealth and a 20 percent increase in the amount of taxes businesses will pay. Like all averages, this 20 percent figure, as significant as it is, does not convey the fact that some businesses will see a fourfold tax increase under this new taxing regime!

Proponents of this corporate tax increase think that the hardest hit businesses are, in fact, a captive audience, and that they will not react to these steep tax hikes. That simply is not accurate. While it is true some may not close their Massachusetts operations as a result of this change, many other multinational taxpayers affected by this legislation could.

Large manufacturers, pharmaceutical companies and medical device makers — all negatively impacted by these tax changes — have choices where to make new investments and hire additional employees. If the return on investment in Massachusetts is less relative to other jurisdictions, these companies will stop putting new capital into facilities here. That does not bode well for job retention or creation, economic development and the long-term prosperity of the Commonwealth. It also hurts thousands of vendors located in the Merrimack Valley, with which these large corporations do business.

Sen. Steven Baddour knows this and sought to make the Senate version of the corporate tax bill more acceptable to the business community by offering key floor amendments. Although not adopted, we applaud the senator for standing up for his district in the face of some intense pressure to vote for the bill as reported from the Ways and Means Committee. On behalf of the business community, AIM commends the good senator from Methuen for recognizing that the answer to all fiscal woes of the Commonwealth cannot simply be to increase taxes on the back of businesses.

Thriving businesses provide the economic power of this state. We need to lower the cost of doing business here rather than piling on new costs. Working with pro-business senators like Steven Baddour to keep Massachusetts competitive for the long-term is the only way to solve the state's current budget challenges.

EILEEN MCANNENY

Senior Vice President, Government Affairs

Associated Industries of Massachusetts