COMMENTARY

"No" to Business Taxes —
Or No Vote

June 2002

By Donald J. Pfundstein*
for New Hampshire Business Review

In January, I challenged commerce and industry to demonstrate true leadership. Otherwise, it was clear to me that the Legislature would overcook the golden goose and increase business taxes.

The Legislature had already tripled the business enterprise tax (BET) rate from 0.25% to 0.75%. At 8.5%, the business profits tax (BPT) rate made New Hampshire unattractive as a host for business investment. Enough was enough!

"Recognizing that New Hampshire's failure to finally resolve the education funding problem [had] resulted in economic uncertainty," Jerry Little of the NH Bankers Association commissioned an economic study, "Budget Deficits and Business Taxes in New Hampshire - May 2002." The Bankers' study dispelled the notion that these "temporary tweaks" do not harm the economy long term. As the study points out, even a small increase in business taxes will create a significant drag on the state's economy. Just a little "tweak" will cause critical losses in New Hampshire jobs, sales, investment, household earnings and gross state product.

The Business and Industry Association of New Hampshire has produced a useful pamphlet, "What Every Business Needs to Know About Education Funding in New Hampshire." It provides meaningful information and urges business people to caution their legislators against increasing business taxes. Other trade associations including the New Hampshire Home Builders & Remodelers Association, New Hampshire Auto Dealers Association, Manchester and Nashua chambers, the New Hampshire Realtors, and the Retail Merchants Association have been working hard against increased business taxes. (If I forgot somebody, please accept my apology and thank you for your help.)

Although business groups are gaining traction, it's time to put the debate on the front page. Let's make all "would be" governors tell us exactly where they are on increasing business taxes.

When you are solicited for support or a contribution, make sure the candidate takes the following "no business tax oath":

"I, (insert candidate's name), do solemnly swear to resign from office before allowing a net increase in either the business enterprise tax (BET) or business profits tax (BPT), or a new business tax to become law."

Any candidate who equivocates on the "no business tax oath" should not receive the vote or resources of the business community. When we know where the candidates are on increasing business taxes, we can then focus on their positions on other issues and make an informed choice. It's really rather simple. Let's not let them off the hook. "No" to business taxes, or you don't get our vote!

To those of you who dislike a litmus test, I offer no apology. Get serious about your business … now!

*Donald J. Pfundstein is admitted in New Hampshire.

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