What is Steve Bailey’s problem?

I found Steve Bailey’s column in today’s Globe more than a little misleading.  Steve’s all mad at the Governor — he says:

Governor Patrick, by contrast, is proposing a large tax increase for business as part of his plan to close a billion-dollar budget gap. His timing could not be worse. A tax increase should be dead on arrival on Beacon Hill.

Seems simple, though we could disagree.  Ah — but it’s not so simple.  Because, actually, Bailey likes a lot of what the Gov is proposing:

One of Patrick’s earliest initiatives was to target the closing of so-called corporate tax loopholes. Although the economy has deteriorated considerably since then, the governor remains right on the policy. As now written, the tax codes allow big multistate corporations to game the system, shifting profits to low-tax states like Delaware.

More than 20 states now use what is called combined reporting to counter this income-shifting game; Massachusetts should do the same.

OK, then — Bailey’s with Deval on combined reporting.  So what’s he so upset about?

Massachusetts could do this without raising taxes on business by significantly lowering the state’s high (9.5 percent) corporate tax rate, thus keeping the changes revenue neutral.

That, however, does not suit Patrick’s needs.

Uh, Steve?  Did you catch this part of the Gov’s budget announcement?

In response to thoughtful discussion about corporate tax policy over the past year, the Administration is also proposing to reduce the corporate tax rate from 9.5 percent to 8.3 percent over three years, cutting the rate to 9.1 percent in 2010, 8.7 percent in 2011, and 8.3 percent in 2012. These substantial rate reductions will help Massachusetts’ businesses, especially smaller and in-state businesses, compete in the global economy.

So what’s Bailey’s problem?  He says he wants combined reporting; Deval gives it to him.  He says he wants a cut in the corporate tax rate; Deval gives him that too.  Is his problem that the cut in the tax rate isn’t fast enough?  He doesn’t say — because he doesn’t even acknowledge that the Gov proposes cutting the tax rate at all.  To read the column, you’d think there was no such proposal on the table.

A shabby column by a usually smart guy, who is unfortunately letting his obvious dislike for Governor Patrick get in the way of writing a coherent statement.

Please share widely!

0

0