Here in NH, the Democrats shoved a radical change to how LLCs are taxes – and to have Government determine how much the owners could take as "reasonable compensation" before it could kick in. Regular readers have seen updates as small business owners have started a rebellion (thanks to Andy Sanborn and Andrew Hemingway) Tag that along with the proposed MaggieCare which would have Government determine if a hospital is charging "equitable" fees (and getting taxed to boot for the "opportunity"), you can see that the Progressives agenda here in NH is the same as it is in DC – putting Government into charge of everything (after all, we individual schlubs just aren’t capable of running our own lives and affairs!).
Jack Kimball is running for Governor here in NH and has a take on the LLC tax flip-flop by Governor John "Do Nuttin’" Lynch (D):
A few days ago, Governor Lynch decided to reverse his position on the controversial LLC tax. While I could not be happier with this position, Gov. Lynch’s advocacy shows his true colors.
The LLC tax was a last-minute change to the budget, created at 10:00 pm on the last day of negotiations, without even a public hearing. The tax places an additional 5% levy on interests and dividends of corporations, on top of the 8.5% business profits tax. It was supposed to bring in another $15 million dollars a year to state coffers.
So why the flip-flop? Gov. Lynch is now worried that larger corporations will be able to get out paying their share of the taxes with the help of tax professionals. This means that for all the political trouble the LLC tax has caused, Gov. Lynch will be getting even less money out of the deal than he hoped.
But Gov. Lynch is still getting all he can out of it. He waited until the legislature had already voted to implement the tax rules for 2009 before beginning talk of repeal. This means that even if the tax does get repealed, businesses are still forced to pay it this year. If Gov. Lynch really does care about the well-being of small businesses in the state, why did he not repeal the tax a week earlier?
Even the “talk of repeal” process is political. Rather than coming straight out and sponsoring a bill for repealing the tax, high-level Democrats are strategizing with the Governor about their plan for repealing the bill. In secret, of course. Repealing a bill does not need a strategy session, and it certainly does not need to be done in secret. Unless, of course, you want to replace the LLC tax with some equally unpopular way of raising revenue.
This gets to the heart of Governor Lynch and the Democrat’s real problem: New Hampshire has a spending problem, not a revenue problem.
New Hampshire needs a balanced budget, but this will never happen by raising taxes. All raising taxes will do is hurt our economy by driving away businesses and giving people less spending power. This will in turn decrease the tax base.
If elected Governor, I will address New Hampshire’s spending problem. Cutting down the size of government and increasing efficiency will get rid of government waste. Creating economic incentives and a favorable climate for small businesses will broaden our tax base. Lowering taxes will put more money in citizens’ pockets, which will in turn help our economy rebound. Only then will we see state revenues–and prosperity–going up.
Lynch tried to fiscally help cover for the House and Senate Democrat leadership – but when the buzz saws turned from being on the LLCs to being wielded by those same LLCs, Lynch caved. He gave up. He’s swinging in the political winds.
And now, he’s getting caught…..imagine, such a "popular" Gov with historical approval rates of 60-70% is down around 50%?? And Jack, a new comer to politics THIS YEAR, is in the 30s?
Hah! Wait until Lynch has to start laying off more SEIU union members!
Glub, glub, glub…..
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