Gorbea wants RI to raise corporate tax rate; McKee, Foulkes balk

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PROVIDENCE, RI (WPRI) – Democrat Nellie Gorbea is calling on Rhode Island to raise its corporate tax rate less than a decade after lawmakers lowered it, exposing a rift between the party’s candidates for office. governor.

In her first campaign TV ad – which began airing on Tuesday – Gorbea tells voters she will “raise taxes on big business” to fund housing development, create universal pre-kindergarten and help small businesses. A banner on the screen reads: “Raise corporate taxes”.

Asked about the details, Gorbea campaign manager Dana Walton told 12 News that Gorbea wanted to increase the tax rate on corporate income from 7% to 8%, which would correspond assess in Massachusetts. His campaign estimates the change would generate about $39 million a year in additional revenue for the state.

Gorbea’s proposal would partially reverse a decision made in 2014 by the then government. Lincoln Chafee and the Democratic legislative leaders, who lowered the corporate tax rate from 9% to 7%. Chafee hailed the reduction as an “important step in making us more competitive” at the time.

“Nellie is the only candidate in the race who is willing to define how her administration will pay to solve the problems facing Rhode Islanders,” Walton said in an email. “For too long, the state budget has been balanced on the backs of the middle class and small businesses, and it’s time to change that.”

Gorbea supports three other policies that would also increase corporate tax bills, Walton said: raise the tax on financial institutions from 9% to 10.5%, generating about $6 million a year; eliminating what she called “cherished” exemptions for the benefit of hedge funds and dividend recipients; and closing what she described as a loophole involving offshore tax havens, generating around $43 million.

Gorbea’s proposal was immediately rejected by two of his Democratic rivals, incumbent Governor Dan McKee and former CVS leader Helena Foulkes.

McKee’s campaign manager Brexton Isaacs called the secretary of state’s tax proposals “extremely risky.” He opposed his ideas to McKee’s package of pending tax cuts in the state budget, including a faster phase-out of the municipal car tax and a tax credit for some parents.

“We are one of the fastest growing economies right now and his plan would set us back,” Isaacs said. “The people of Rhode Island don’t want a governor who opens his campaign by proposing tax hikes; it’s the old way of doing business.

“We need to grow our economy for everyone and that is why Governor McKee is adamantly opposed to raising taxes on Rhode Island businesses,” he added.

Foulkes also dismissed the idea, telling 12 News, “I haven’t seen any details about it from the secretary, but it sounds like a proposal to chase Rhode Island jobs.” She pitted the idea of ​​the tax hike against her proposals to give middle-income families a $500 tax cut and spend more on K-12 education.

“If the next governor targets Rhode Island businesses with new taxes, the reality is that many will leave and take thousands of jobs with them,” Foulkes said. “We have enough trouble recruiting and retaining businesses in this state – that’s why we need a governor who understands the new economy.”

She added, “Cronyship held Rhode Island back for decades. It’s time to do great things in Rhode Island, not drive out corporations with ill-thought-out tax policy.

Gorbea’s general approach received a warmer reception from the two left-leaning primary candidates, former Secretary of State Matt Brown and community activist Luis Daniel Muñoz, but both said they differed on the details.

Brown would institute “a progressive corporate tax that would raise taxes on giant corporations like Walmart and Amazon while easing the burden on our small businesses,” spokesman AJ Braverman said, adding that he also wants to end the practice of providing public subsidies for “giant corporations and wealthy developers.

Muñoz said: “I support increasing corporate taxes and want to offer a more thoughtful strategy around this topic than a one-off line in a TV commercial: As governor, I would work to raise our rate. corporate tax at 7.5%, which is still keeping us competitive with Massachusetts.

Across the aisle, the leading Republican gubernatorial candidate, Ashley Kalus, condemned Gorbea’s proposal, saying it would make the inflation problem worse as companies would pass on increased costs to consumers.

“These kinds of failed policies from career politicians like Nellie Gorbea have made Rhode Island the 46th worst state in the nation to do business in, and this decision will almost guarantee we’ll be last again,” Kalus said. “Our state should be fostering an economic climate that attracts business and development, not implementing policies that will drive away people, jobs and opportunity.”

Ted Nesi ([email protected]) is a Target 12 investigative reporter and a 12 News political/economics editor. He co-hosts Newsmakers and writes Nesi’s Notes on Saturdays. Connect with him on Twitter and Facebook

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