Is DiMasi angling for another fight with Deval, this time on corporate taxes? Deval and his corporate tax commission are arguing for a point reduction in the effective corporate tax rate from 9.5% to 8.5%. DiMasi, not a gambling sort, is going a bit shy of one better to 7. Who will win this battle?
BOSTON-House Speaker Salvatore DiMasi proposed a 26 percent reduction in the state’s corporate tax rate on Tuesday, while endorsing Gov. Deval Patrick’s plan to balance the budget by closing business tax loopholes.
DiMasi, who a year ago called Patrick’s plan to close the tax loopholes a “catalyst to reduce jobs,” acknowledged Tuesday that the state needs new revenues to close a $1.3 billion budget gap, and softened the blow to businesses by offering them a tax cut twice as big as that Patrick unveiled last month with his $28.2 billion budget.
“I wouldn’t say I changed my position,” he said at a news conference. “I’ve always said that all of this has to be balanced with the revenues needed to balance our budget. There’s a balancing test here. Obviously this is a very difficult fiscal year. We were looking for revenue sources, at the same time trying to make this corporate tax (rate) fair, more predictable.”
… DiMasi’s plan would reduce the current rate of 9.5 percent to 7 percent by 2011. Patrick proposed a reduction to 8.3 percent by 2012.
“There are some very positive things in what the speaker put forward,” said Paul Guzzi, president of the Greater Boston Chamber of Commerce.
The ideal rate is 5.3 which would align the corporate rate with the PIT rate. The price for this low rate would be the elimination of those favorite tax breaks doled out to politically connected industries such as film, energy and other concerns.
More on the DiMasi package here: