(NECN: Lauren Collins – Manchester, N.H.) - There is a mathematical law that applies along the Massachusetts-New Hampshire border. When taxes go up in the south:
“We'll see those people on the border move right into New Hampshire and look for jobs in New Hampshire, which will help our New Hampshire economy,” said the state’s Americans for Prosperity chapter president Corey Lewandowski.
Charlie Arlinghaus of the Josiah Bartlett Center agreed. “Southern New Hampshire is based on being a tax refugee haven,” he said.
Granite State watchdog groups said that goes for businesses, too. Deval Patrick's proposal to raise his state's income tax by a full percentage point will likely revive New Hampshire's efforts to get companies to move north, in spite of oft-criticized business taxes.
Arlinghaus said companies will turn to tax attorneys and ask, “What are things really like north of the border?”
“It doesn’t guarantee people come here,” he said, “but it guarantees they take a look at coming here.”
Especially as New Hampshire's legislature considers a bill that would double the limit on the research and development tax credit from $1 million to $2 million.
“They understand that as businesses need to increase their profitability and spend more money in research and development, [it] will allow them to hire more people,” Lewandowski said.
Even Democratic New Hampshire Governor Maggie Hassan coyly told the New Hampshire Union Leader that if Patrick's "approach leads to an economic boost for us, then I welcome it."
She is against income tax and recently said she would veto a proposed hike in the beer tax. Yet New Hampshire’s recent budgets are tighter than ever, and the call for a change to the Granite State's so-called "advantage" is louder than ever.
“Deval Patrick wanting to raise taxes means Maggie Hassan will be less likely to raise taxes,” Arlinghaus said. “It's not that she has room; it's that she now has to point out New Hampshire’s difference in stark contrast.”
Patrick will unveil his full budget on Wednesday. New Hampshire lawmakers have a hearing on the R&D tax credit on Tuesday.