BOSTON The economy in Massachusetts may be faring better than the rest of the country, but it’s still far behind the boom years of the late 1990s when the state enjoyed dwindling unemployment and surging revenues. At times, it seemed the state had more money than lawmakers knew what to do with.
Now comes the special election for a U.S. Senate seat, and Massachusetts’ economic ups and downs — the boom, the more recent bust of the recession years, and its modest rebound — haven’t gotten major play in the contest between Republican Gabriel Gomez and Democrat Edward Markey.
“I could consider lowering the corporate tax rate, but it would have to be part of a comprehensive reform that closes the loopholes.”
But that could be changing.
Both candidates have begun staking out positions, though at times hard to distinguish, on the best way to help maintain and accelerate the recovery.
Voters will get to sort it all out June 25 when they will elect a successor to John Kerry, who resigned to become secretary of state.
While Gomez has tried to portray Markey as a fan of tax hikes and Markey has tried to cast Gomez as beholden to indiscriminate tax-cutting, both candidates say they’re against taking a “no new taxes” pledge and both say they would back some kind of “comprehensive tax reform.”
Gomez said his ideal plan would include lowering the corporate tax rate to less than 30 percent; closing corporate loopholes, such as deductions for private jets; and ending personal tax loopholes, such as the carried interest deduction.
“Our budget is a mess because of partisan politics in Washington and nothing should be off the table to get our fiscal house in order,” Gomez said.
Markey, too, said he could support ending tax loopholes for businesses and, like Gomez, called for a sweeping overhaul of the nation’s tax laws. But Markey said he would want to target his tax cuts.
“I could consider lowering the corporate tax rate, but it would have to be part of a comprehensive reform that closes the loopholes,” he said. “It’s my goal to reduce the taxes on those who deserve to have their taxes reduced.”
The question of how best to strengthen the Massachusetts economy goes beyond tax policy, of course. With limited natural resources, Massachusetts has staked a good chunk of its financial fortunes on a “knowledge-based” economy that includes Internet startups, biotech companies and the so-called green economy.
“Our budget is a mess because of partisan politics in Washington and nothing should be off the table to get our fiscal house in order.”
Gomez said that if he’s elected, he would try to bolster that knowledge-based economy by making it “a priority to develop and support new trade agreements and building relationships with other countries to make Massachusetts a leader in high tech not only in the United States but the world.”
Markey said one of the biggest levers pushing down the state’s knowledge-based economy is the recent round of across-the-board federal budget cuts known as sequestration. He pointed to cuts to the National Institutes of Health, which helps fund research programs in Massachusetts.
“(Sequestration) cuts into education funding. It cuts into health care funding. It cuts into clean tech funding,” Markey told reporters Friday. “All of those things are at the heart of what our business plan is for the state of Massachusetts.”
Markey said the automatic cuts are also hurting federal small business investment research grants, which he said disproportionately benefit Massachusetts.
Gomez said other ways exist to lure businesses to the state and help retain those already here. He said he would push to repeal the medical device tax included in President Barack Obama’s 2010 federal health care law. Gomez said the tax puts a burden on the medical device industry in Massachusetts.
Gomez also pointed to a natural resource that is still a key part of the Massachusetts economy: seafood. Gomez said he would be a strong advocate for the state’s beleaguered fishing industry.
“I would fight overly restrictive federal fishing regulations to allow our state’s fisherman to continue to make a living off of the sea,” said Gomez, who praised Massachusetts Attorney General Martha Coakley’s recent decision to sue the National Oceanic and Atmospheric Administration to try to block major new cuts in catch limits for bottom-dwelling groundfish.
Gomez tried to drive home what he said is his commitment to small businesses with a visit to an auto body shop in the Mattapan neighborhood of Boston. He said that for many small-business owners, the federal government is more of a hindrance than a help.
“It’s a pretty recurring theme that they’re struggling and they’re disappointed in the way things are coming up from D.C.,” Gomez said. “While they’re struggling, it seems like Washington keeps making their problems worse.”
Markey said that while Massachusetts is still far from the turbo-charged economy of more than a decade ago, things have been looking up.
“I think Gov. Patrick has been doing a good job,” Markey said. “We could always do better, but I just think it’s important for us to keep in context that the business plan of health care, education, biotech, clean tech and telecom tech has really put us at the forefront of the recovery.”