ICYMI: The Granite State Groans: Texas, Stop Messing With Us
The Granite State Groans: Texas, Stop Messing With Us
By Andrew Cline
Granite State Democrats are spooked by a man more than 1,000 miles away: Texas Gov. Greg Abbott. This summer Mr. Abbott helped clarify a long-standing political debate here when he tried to lure New Hampshire businesses down south. But the free economics lesson he offered seems to have gone right over New Hampshire Democrats’ heads.
The story starts with the Republican legislature’s attempt to cut business taxes. New Hampshire levies no personal income tax or sales tax, which has given it a low-tax reputation. But corporate taxes are high. New Hampshire generates nearly a quarter of its revenue from two taxes on business—an 8.5% tax on corporate income and a 0.75% tax on payroll, interest and dividends. The nonpartisan Tax Foundation ranks New Hampshire’s corporate tax burden as third highest in the country—worse even than its neighbors in the famously business-unfriendly Northeast. Maine is ranked sixth highest and Vermont ninth. Massachusetts, the state mocked as Taxachusetts, comes in at 14th highest. ...
Citing that change and the business rate cuts, New Hampshire’s Democratic governor, Maggie Hassan, vetoed the legislature’s budget package on June 25.
That was the Texas governor’s cue. Four days after the veto Gov. Abbott, a Republican, wrote a letter to Planet Fitness CEO Chris Rondeau inviting him to consider relocating to the Lone Star State. “I’m sure governors from across America are knocking down your door since Governor Hassan vetoed a budget that included business tax cuts,” Mr. Abbott wrote. “But how many of my colleagues just passed a total tax relief package of $3.8 billion like we did recently in Texas?” He sent the letter to seven other New Hampshire businesses, including Sig Sauer, GE Aviation and New Hampshire Ball Bearings. Democrats were not amused. ...
As New Hampshire’s governor was demonizing businesses that pay the tax, Gov. Abbott was wooing them. To spread the Lone Star economic gospel further, the Texan issued news releases to New Hampshire media after the veto, and then wrote an op-ed for the New Hampshire Union Leader (the newspaper where I work) urging Granite State companies to consider relocating. ...
When Republican legislators circulated copies of Gov. Abbott’s news releases to show the consequences of vetoing the tax cut, Democrats accused them of disloyalty to New Hampshire. The party’s state chairman called the Texas governor’s move a “misinformed stunt” and said that “New Hampshire Republicans played right along, reinforcing that they put politics ahead of New Hampshire’s families, businesses, and economy.” ...
Democrats can insist on maintaining the state’s high business tax rates, and refusing other reforms (such as right-to-work and sunset laws for regulations) embraced by Texas years ago. What they can’t do, when New Hampshire’s economy continues to lose ground to faster-growing states, is act as if no one warned them.
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