Explain How It Would Do Nothing for New Hampshire Small Businesses and Economy
Manchester, NH – This morning on NHPR's “The Exchange,” guests called failed CEO Walt Havenstein's so-called “plan” to create 25,000 jobs a “pipe dream,” explained how it'd do nothing for New Hampshire small businesses and economy, and highlighted his flip-flop on energy, including biomass.
During the segment, Jeff Feingold, editor of the New Hampshire Business Review, questioned the logic of Havenstein's so-called “plan” to create 25,000 jobs, saying, "I've talked to economists about it, and it's almost like a pipe dream."
NH1's Kevin Landrigan added that Havenstein's "plan" would do nothing for New Hampshire's small businesses, noting that "studies from think tanks from the left wing to the right wing have all said the same thing about the Business Profits Tax, which is essentially that about 80% of it is paid by the 100 largest companies in the state. It is a big business tax."
Listen here for the full audio from this morning’s “The Exchange”
See below for a transcript:
Feingold: Haventstein has brought up this issue of cutting substantially the business profits tax, which is the state's largest single revenue raiser. And his goal he says is to create something like 25,000 jobs in two years, which, I've talked to economists about it, and it's almost like a pipe dream. And, it's really a matter of... there's so many issues at play, so many factors at play in terms of the economy, the lack of young people, the infrastructure, and absolutely the real estate and construction industry market which has been still stagnate. So, I mean those issues are coming up but there are other issues like minimum wage is a really big issue, that I think has resonated with some of the smaller businesses. The interesting thing to me is that it seems most of it is on the surface when we're talking about business issues. There's not really any in depth discussion; there's not really even a discussion about what cutting the Business Profits Tax would actually mean for the state and for businesses in general, because a lot of businesses don't pay the Business Profits Tax, they pay the Business Enterprise Tax, which is another issue entirely.
Knoy: Well it's good to get your perspective on this, again, since you are the editor of New Hampshire Review and have for a long time and Kevin, you asked Walt Havenstein at our debate about that, cut the Business Profits Tax, you asked him why not the Business Enterprise Tax? Now someone listening may say 'what's the difference, it's all alphabet soup?' but give us a little bit more on that, please.
Landrigan: Yeah, as Jeff pointed out, every company pays the business enterprise tax which is essentially the state payroll tax...
Knoy: Every company, from the biggest to smallest.
Landrigan: It’s also… biggest to smallest, and you also pay it on interest and your payroll. So, the question really is, Walt Havenstein wants to create 25,000 jobs by the middle of 2017. As we know, most starts up, even start ups that do well, they don’t make much money, early on, the don’t make much profit at all. And as we’ve seen, studies from think tanks from the left wing to the right wing have all said the same thing about the business profits tax, which is essentially that 80% of it is paid by the 100 largest companies in the state. It is a big business tax for the most part. So if you cut that tax, you’re giving a big tax cut to employers, frankly, who are already here. And so the question is, ‘what kind of economic stimulus would that really have?’.
Knoy: So his point would be, Kevin, ‘hey, corporate taxes, if we lower them in New Hampshire, will encourage other major corporations to come here’.
Landrigan: Yeah, he essentially said that, irrespective of the question, that our corporate profits tax rate, at 8.5%, is the 3rd highest in the country, and that if we cut that rate, it would send the message that New Hampshire is more open for business, is more friendly to business than it is right now.
Knoy: We also talked with Walt Havenstein at our Rudman Conversations With the Candidates Series, I think it was Monday night, but after this week I’m starting to forget which night was who. But let’s hear a little bit more about Mr. Havenstein. This is where he talked about his energy policy:
[Havenstein: I do not support, uh, I do not support wind turbines, and frankly I do not support solar, because they do not fundamentally compete economically with other sources. They do not, they don’t compete because they’re not base power, so you gotta, you gotta figure… intermittent, and frankly we’re subsidizing them and I won’t… it doesn't make sense for us, when our rates are as high as they are, that we should be subsidizing those technologies.]
Knoy: Yeah, and energy has emerged, right Kathleen, as a big issue in these race, given that, while oil and gas prices are down, people are really concerned about electricity rates, and also the price of natural gas?
Ronayne: Yeah, we've seen it definitely emerge as an issue in the Governor’s race, and I think what’s interesting about Walt Havenstein, I think I saw in your story from the Conversations also, is that he mentioned biomass as something that he thinks would be a good source of energy. The democrats have hit him because earlier in the campaign he was doing a stop somewhere and said that he did not think biomass was economically viable, so I’m a little confused about what his position is on biomass.