House and Senate Republicans are rallying around efforts by Senate Minority Leader Richard R. Tisei and House Minority Leader Bradley H. Jones, Jr. to preserve Massachusetts jobs by repealing the $500 million corporate tax increase that took effect on January 1.
Twenty Republicans are co-sponsoring legislation filed last month by the two GOP leaders to repeal the tax increase and eliminate some of its more onerous provisions, including the new unitary combined reporting requirement. These tax changes impact many multi-state companies that are based outside of Massachusetts but employ nearly 40 percent of the state’s workforce.
At least one major business group, the Organization for International Investment (OFII), has already advised its member companies to “suspend consideration of new investments and expansions in Massachusetts” because of the recent tax law changes. OFII represents over 150 U.S. subsidiaries of foreign-based companies, and its member companies currently employ over 173,000 people in Massachusetts, or nearly 6 percent of the Commonwealth’s private sector workforce.
“This should be a wake-up call to the Legislature,” said Senator Tisei. “You can be sure that other businesses are going to follow OFII’s lead and curb their plans for expansion in Massachusetts while taking their jobs to states that offer a more favorable business climate. The timing couldn’t be worse, because losing these jobs will cripple our state’s economy and prevent us from making a strong recovery once the recession ends.”
“If companies are dissuaded from coming here, they will flock to other states that are considerably more tax friendly to businesses in order to lay down roots and create jobs,” said Representative Jones. “We need job creation now more than ever, and with the passing of one law, companies are saying goodbye to the Commonwealth. Not only was the passing of this law a bad decision, but a kiss of death for potential economic growth in Massachusetts.”
In 2007, while serving on a special commission that reviewed the state’s corporate tax laws, Tisei and Jones advocated the adoption of a more streamlined corporate tax structure to help promote jobs creation and business expansion. Neither lawmaker supported the commission’s final recommendations, but instead led a unified and unanimous show of Republican opposition against the resulting bill, which implemented what is believed to be the largest business tax increase ever passed in the Commonwealth.
Tisei and Jones expressed disappointment that not a single Democrat agreed to sign on to the repeal bill. However, they expressed confidence that their proposal will begin to win converts as the economy worsens and the state’s jobless rate increases.
“We should be doing everything we can to convince employers that Massachusetts remains a good place to do business, and what better way to do that than to repeal the combined reporting law and eliminate the half a billion dollar tax burden that is now impacting our business community?” noted Tisei and Jones.
Thursday, February 12, 2009
Republicans Fight to Repeal Corporate Tax Increase
Posted by Massachusetts House Republicans at 2:08 PM