According to CTMirror.org, Democrats in the state legislature have discussed a plan to raise more revenue that would involve enticing businesses to voluntarily pay more in taxes in exchange for a tax credit later on.
As the leader of the Senate explained to The Mirror: “We believe this will help businesses plan for their taxes and give them the predictability that they want,” Senate President Pro Tem Martin M. Looney, D-New Haven.
Stop and think about that statement for a moment. If we polled 100 businesses, it's doubtful the majority would say the "predictability" they are looking for is paying more in taxes in every budget.
Now, I know there is the "promise" of a tax credit down the road for businesses that volunteer to pay more up front, but that "promise" isn't worth the paper it's printed on. Not with this state legislature.
As any business will tell you, far too often promised tax credits have been delayed, or eliminated entirely, as a way to "fix" budget hole after budget hole.
Exhibit A: The Research & Development tax credit. This happens to be one of the most lucrative — not just for businesses that utilize it, but for the state's economy overall. A nonpartisan study found that the return on investment for this credit is 30 to 1! That means for every dollar in credit taken by a company for R&D, $30 is returned to the state's economy.
All of our neighboring states offer a 70% tax credit for money invested in R&D. Connecticut offered the same ... until last December, when during a Special Session to fix yet another hole in the budget the credit was reduced to just over 50 percent, with the promise to walk it back up to 70% in steps over the next several years. There was a bill in the current legislative session, SB 399, that would have restored the full credit within two years, but it would have reduced revenue in FY 2017 by $500,000 and FY 2018 by $2 million, so it went nowhere.
But hey, if predictability is what businesses want, Sen. Looney is only too happy to oblige. You want predictability in state taxes, you got it. One way or another, whether its mandatory or voluntary, you're going to pay more.