Minnesota, Georgia, and New Jersey Consider Cutting Taxes
By Oregon Tax News,
Despite the current recession and budget deficits facing many states, Minnesota, Georgia, and New Jersey are considering cutting taxes along with statewide budgets.
Minnesota has the third highest corporate income tax in the developed world and an unemployment rate of 7.4% and a $1.2 billion deficit. Yet, Governor Tim Pawlenty proposed a plan to cut taxes on job providers in an effort to promote the private sector and remove obstacles to business growth. His plan includes a 20 percent cut in the corporate tax rate, a 20 percent exclusion from taxes for small businesses, a variety of tax credits and incentives for companies to invest in Minnesota small businesses.
Pawlenty wants to cut Minnesota’s two-year $30 billion budget to finance his proposal. The governor notes that the budget has grown an average of 21% every biennium, and even as high as 46% in some years. Pawlenty hopes to curb the unsustainable state spending spree.
Another program Pawlenty supports is the Job Opportunity Building Zones (JOBZ), which would offer tax breaks to businesses that locate or expand in economically depressed rural areas. He also wants a constitutional amendment to limit future spending commitments to the amount of revenue that is collected.
In Georgia, Representative Tom Graves (R-Ranger) introduced House Bill 1023, a JOBS Act that would eliminate the state’s net worth tax, halve its capital gains tax, and give tax credits to businesses that hire new employees. The bill could help reverse Georgia’s 23 consecutive months of increased unemployment rates. It could come to a vote on the House floor in April.
In New Jersey, Governor Chris Christie is considering eliminating or scaling back property-tax rebates during his first attempt to craft and balance the state budget. Christie is confronting a deficit that could be as high as $11 billion. Christie will save the state $1.1 billion by eliminating the rebates but he would break a campaign promise in the process.