Gov. Rell and legislative leaders are turning their focus away from social and political issues to economic ones. Among the proposals floating around is the elimination of the corporate surcharge:
House Speaker James Amann told about 500 business executives in Hartford that he would consider cutting or eliminating the corporate tax surcharge - a tax hike that has irked business leaders in recent years and is expected to generate $65 million to $70 million in 2006.
House Republican leader Robert Ward, R-Northford, agreed that the corporate surcharge should be reduced or eliminated.
"Gov. Rell proposed a phase-out of the corporate tax surcharge last year, but that proposal was rejected," said Judd Everhart, Rell's spokesman. "She is taking another serious look at the corporate tax this year because she believes it is a hindrance to economic development and jobs growth for Connecticut companies. Stimulating Connecticut's economy is her top priority." (Keating)
...It is? Since when?
Actually, it isn't surprising that Rell has turned her attention to economics, which is the area in which she is currently weakest. Will a corporate tax cut help the economy? Business leaders seem to think so. It will, they say, make Connecticut a more "business friendly" place.
If a corporate tax cut will help lure businesses to Connecticut, if the government can afford to lose that money, and if other major priorities like education and transportation aren't adversely affected...then why not? Republicans want to take it further, eliminating the gift and estate tax, although the connection to business and job growth there is less clear.
Other taxes may be on the block instead of this one.
Senate President Pro Tem Donald Williams, D-Brooklyn, said lawmakers should speak with economists and business leaders before deciding which taxes to cut.
"It makes sense to have some hearings and determine what would give us the biggest bang for the buck for Connecticut's economy," Williams said. (Keating)
This is probably smart. Whatever the final outcome, moving deliberately and heeding the advice of business leaders will hopefully lead to better economic times in Connecticut.
Keating, Christopher. "Corporate Tax Cuts On State's Table." Hartford Courant 6 January, 2006.