Stop spinning yarns about N.H. tax cut proposals
Small businesses won't be helped, and neither will the state's competitiveness
I’ve been a small business owner in New Hampshire for 44 years. I started Harrisville Designs in 1971. We make high-quality, natural 100 percent wool yarns for knitting and weaving, carded fleece for felting and spinning, finely handcrafted floor looms and an awarding-winning line of weaving products for children.
My family’s involvement in the weaving business and our investment in this community date back to the mid-1800s. After the long-running Cheshire Mills closed down in 1970, I started the new business to keep the textile tradition alive and create jobs and a center of economic activity for our town.
I think it’s fair to say I have a bit of experience both with spinning yarn and with doing what it takes to strengthen the economic fabric of a local community.
From that standpoint, I’m concerned that some of the proposed tax policies advancing in Concord, policies that are being spun in the name of small businesses like mine, will tear at that economic fabric instead of strengthen it.
I believe the proposals for business tax cuts in the state Senate and House will, contrary to how they are being marketed, work against the goals of helping small businesses and helping New Hampshire compete economically.
When we look at the proposals, there are a few questions I think every small business owner and every lawmaker should consider carefully.
First: Will these tax proposals help local, homegrown small businesses create jobs? In the case of my business and other local businesses I know, the answer is no. The proposed cuts to the business profits tax and business enterprise tax will overwhelmingly benefit the “big guys.” They’ll have very little impact on small businesses like mine.
Based on the numbers I got from my accountant for what my business paid in these taxes last year, we might get back about $600 from the cuts passed by the Senate, or $50 a month. That’s not going to help us create jobs. I think most other small businesses are in the same boat.
Second: Will these tax cuts help make New Hampshire more competitive? Frankly, I don’t see how. Instead, I worry they’ll make us less competitive by setting New Hampshire back when it comes to investing in workforce development, making energy and health care costs affordable, and funding local infrastructure projects that pave our roads and fix our bridges. These are all more important to small businesses than the nominal business tax rate because, in reality, state business taxes are such a small fraction of the overall costs of doing business.
Third: Will the tax cuts “pay for themselves,” as some have claimed? If only … but decades of experience with this “trickle-down” idea have shown again and again that it just ain’t so. People who are more interested in ideology than reality can say it until they’re blue in the face, but that won’t make the hole they just blew in the state budget any less red.
Do the folks who think tax cuts will pay for themselves also think the roads will plow themselves? Plowing roads costs money. Tax cuts do, too.
And, since the proposed tax cuts won’t pay for themselves, who will end up paying for them? The hard truth is, our local communities and local economies will have to foot the bill for these cuts, in the form of reduced state investments, more downshifting of costs and responsibilities to local governments, and higher local property taxes.
This will hurt local businesses, not help us.
The state budget has already been worn threadbare after many years of trying to do more with less. Small business owners know you can only do more with less for so long. If you don’t start making investments again at some point, you wind up doing less with less. And that’s what will really hurt New Hampshire’s competitiveness.
Chick Colony is co-owner of Harrisville Designs, a family-run business he founded in Harrisville in 1971.