Republican gubernatorial candidate Scott Milne says Vermont is in need of a short-term economic stimulus. And his controversial plan would extend substantial tax cuts to Vermont businesses and their investors.
It took a while for Milne to unveil any specific policy proposals. But the challenger to Democratic Gov. Peter Shumlin is looking to generate some late-race momentum with what he admits is a quote “provocative” concept.
Milne calls it the “Green Mountain Opportunity Initiative,” and it involves corporate tax exemptions for any new business that starts in Vermont over the next three years.
“This building our base plan is designed really to be a shot in the arm to get us back on track, to be simple, simple and attractive to investors,” Milne says.
Milne delivered his remarks at Growlers Garage, a six-week-old craft beer establishment in South Burlington. A small coterie of Milne supporters watched from bar stools as the candidate made his pitch to reporters.
Milne wants new businesses to be exempt from paying corporate income taxes for their first five years of profitability. If their payroll continues to grow after that period, the income tax deduction could last as long as a decade.
Milne also wants to encourage new investment in Vermont businesses by giving tax benefits to prospective investors. Pour money into a Vermont company and, under Milne’s plan, any capital gains on that investment would be tax free.
“As far as changing the tone from the top that Vermont’s an employer-friendly state, I believe this will be a very good step in that direction,” Milne says.
Scott Coriell, campaign manager for Peter Shumlin, says Milne’s latest plan is as shortsighted as the property tax cap Milne came out with last week. The Milne property-tax cap, according to Coriell, would open up a $42 million hole in the state’s education budget.
“Now he wants to eliminate income taxes for some Vermont business while asking those already creating jobs to keep paying. It just doesn’t make much sense,” Coriell says.
More problematic, Coriell says, is Milne’s lack of regard for the budgetary damage his proposals would inflict.
“He hasn’t proposed how to pay for any of this – his reckless property tax proposal that would blow a $42 million hole in the budget, or what he announced today,” Coriell says.
Milne says he has no idea how much his plan would cost the state in foregone revenue. And he says it’s true that he’d be giving tax breaks to companies that likely would have formed anyway.
But he says the downstream economic boost generated by the new businesses would more than outweigh the losses associated with the exemptions.
“The theory behind it, and obviously I need to get a Democratically controlled Legislature to agree with me on this, is that rising tide will lift all boats, and that the net benefit to the state will be good,” he says.
Milne says he’ll unveil a plan to cut costs in state government next week.
