TAX NEWS - June 2010

Massachusetts Tax: Baker calls for cuts in corporate income tax

Republican gubernatorial candidate Charlie Baker promised today to reduce the corporate income tax to 5 percent for all businesses in Massachusetts, if he's elected, a move that would save businesses across the Commonwealth more than $175 million, he said.

The plan would be implemented over four years, he said, and would reduce the tax rate from 8.75 percent for many corporations. Other companies, which instead pay 5.3 percent plus another ancillary tax, would also see a reduction.

Baker said his plans to reform state government and a boost in employment as a result of the reduced taxes would offset the loss in state revenue.

The across-the-board tax "will create a level, predictable, and competitive playing field for all business here in Massachusetts and give our business the predictability they need to hire people here and expand here," he told business leaders at a breakfast in a ballroom at the Westin Copley Place hotel. "The best way to grow our economy and create jobs is to encourage the businesses that are already here to stay and hire more people."

Baker also announced plans to waive the sales tax on certain products, if they are energy-efficient, including appliances, windows, and insulation. And he promised a rebate program for LED lighting.

Instead of Cape Wind, he touted Hydro-Québec, a government-owned power company in Canada that generates much of its energy from hydroelectric plants.

"The Patrick administration promotes Cape Wind, which will cost ratepayers two times what they pay now," he said. "I like Hydro-Québec, a clean alternative fuel supplier that has excess capacity and is willing to sell it to us for less than what we pay today. That's a win-win – for ratepayers and the environment."

Baker is challenging Democratic incumbent Deval Patrick. Independent Tim Cahill is also in the race.