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Baker vows to cut business taxes

Aims for $175m and tighter rules for jobless benefits

His approach ‘will create a level, predictable, and competitive playing field for all business here,’ Charles D. Baker said. His approach ‘will create a level, predictable, and competitive playing field for all business here,’ Charles D. Baker said.
By Jack Nicas
Globe Correspondent / June 11, 2010

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Republican candidate Charles D. Baker promised yesterday to cut business taxes by $175 million per year and tighten rules for unemployment benefits if he is elected governor in November.

His plan would reduce corporate taxes to 5 percent by his fourth year in office. Some companies now pay an 8.75 percent tax, while others pay the state income tax of 5.3 percent and a related tax, which Baker said he would eliminate. Baker has previously vowed to reduce both state income and sales taxes to 5 percent.

That approach “will create a level, predictable, and competitive playing field for all business here in Massachusetts and give our businesses the predictability they need to hire people here and expand here,’’ he told members of the Greater Boston Chamber of Commerce in a ballroom of the Westin Copley Place hotel.

He did not offer specifics of how he would offset the $175 million loss in revenue, but said it would be covered by a roughly $1 billion package of proposals he laid out two months ago, including streamlining state government and charging inmates room and board.

A campaign spokeswoman said new jobs created by the lower corporate taxes will help the plan pay for part of its cost.

Baker also addressed energy, saying he would waive the sales tax on certain energy-efficient products. such as appliances, windows, and insulation. He also promised rebates for purchases of LED lighting. He criticized Cape Wind, the windmill project planned for Nantucket Sound, and instead pushed for use of power from a government-owned company in Canada that relies on hydroelectric plants.

“The Patrick administration promotes Cape Wind, which will cost rate payers two times what they pay now,’’ he said. “I like Hydro-Québec, a clean alternative fuel supplier that has excess capacity and is willing to sell it to us for less than what we pay today. That’s a win-win, for rate payers and the environment.’’

Baker also would alter the state’s unemployment program, awarding companies that retain employees and penalizing those that hire seasonally, such as many businesses on Cape Cod. And he would raise the minimum number of work weeks required before collecting unemployment from 15 to 20.

Governor Deval Patrick’s campaign lauded Baker’s green initiatives, but blasted the proposed changes to unemployment.

“This is the exact wrong time . . . to make it harder for people to get unemployment benefits when they lose their job,’’ the campaign said in response to Baker’s speech. “Baker owes it to the people of Massachusetts to not balance this tax cut on the backs of the unemployed and to be straight about what cuts he will make in education, health care, or local aid to pay for his proposals.’’

The Massachusetts High Technology Council applauded Baker’s plan for adding “stability and fairness to the tax system . . . while at the same time lowering costs for Massachusetts families.’’ “In addition, it attacks the traditional ‘worst offenders’ to job growth, like the costliest unemployment insurance system in the nation,’’ the council said.

Near the end of the breakfast, Chamber president Paul Guzzi asked Baker if he would call on the Republican Governors Association to stop running “rather despicable’’ attack ads about independent candidate Timothy J. Cahill that have helped drop the state treasurer to a distant third in the governor’s race.

“Look, I can control what I can control,’’ Baker said. “Neither I nor anyone else can tell any of these groups to stay out of Massachusetts, because at the end of the day, it’s up to them.’’

Jack Nicas can be reached at jnicas@globe.com.

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