Governor Lincoln Chafee is winning a measure of plaudits for a budget with no new taxes and a proposed cut of the corporate tax from 9 percent to 7 percent over three years. But a tax initiative by Massachusetts Governor Deval Patrick is raising uncertainly about the net effect of Chafee's initiative.
Patrick this week proposed raising Massachusetts' income tax from 5.25 to 6.25 percent. In a move posing a particular threat for businesses along the Rhode Island border, Patrick wants to cut the sales tax in Massachusetts from 6.25 percent to 4.5 percent.
"I was surprised to hear that -- the sales tax, such an aggressive move," Chafee said Thursday during a taping of RIPR's Political Roundtable.
Chafee says his intention last year in proposing a broadening and lowering of Rhode Island's sales tax was to give local businesses a competitive edge, particularly in border areas.
"I'll have to see whether Governor Patrick is proposing to get into the services as I did in order to lower it so aggressively," Chafee said. "We want to stay competitive. We'll have to look at this. This is a curveball."
The governor says he'll be watching to see how Massachusetts lawmakers greet Patrick's proposal.
The Political Roundtable segment with Chafee airs Friday at 5:40 and 7:40 a.m. A bonus interview with the governor will air at 6:40 and 8:40 a.m.