The Tax Stat the Right Wing Doesn’t Want You to See


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Downtown Providence from the Providence River. (Photo by Bob Plain)

You’ve seen it so many times before it’s almost a cliché:  An anti-tax, corporate front group produces a report on taxes, and Rhode Island ranks unfavorably.

Invariably next, the fringe-right echoes the findings as confirmation of the correctness of their own solution to every problem, tax cuts for corporations and the wealthy paid for by slashes to government services and to benefits of government workers… win/win in their book. While it’s dangerous to dismiss these out of hand, the rest of us have learned to take these “studies” with a big grain of salt.

That’s why the headline of the recent PBN story caught my interest, “Providence ranked 15th in U.S. for favorable business tax structure.”

Say what? I almost didn’t believe it myself. Who produced that thing, Kate Brewster? Actually it was KPMG, not exactly a liberal front group:

Among a survey of 73 U.S. cities that offer the most favorable tax structures for businesses, Providence ranked 15th overall…

KPMG compiled the ranking using total tax index, a measure used to compare tax burden by comparing the total actual tax cost in U.S. dollars for each jurisdiction…

Among the U.S. cities, Providence ranked ninth for corporate income tax rate, 13th for its other corporate taxes rate, 59th for its statutory labor costs and 15th for its total effective tax rate.

That’s right, 9th and 13th for corporate taxes, offset only by our labor costs, little surprise given the higher cost of living in Northeastern cities. Is there more we can do to attract business? Sure, but the next time you read one of those studies suggesting cuts to spending on infrastructure, schools, and social programs to pay for reductions in corporate taxes don’t forget to ask yourself, is that really the best way to attract business?

Progress Report: URI Is ‘Dramatically’ Underfunded; Local Politcal Dynasties; New Sales Taxes, Strange Speech in NK


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In less than a decade, URI has cut spending by an astonishing 47 percent per student. Here’s how the Providence Journal put it: “State support for Rhode Island’s only public research institution has fallen so dramatically in the past decade that the mission and future of the University of Rhode Island are threatened, according to a national report that echoes the concerns URI’s leaders have voiced for years.”

It’s amazingly shortsighted that our elected leaders wouldn’t properly invest in its higher education students’ future. And make no mistake about it, more public funding for the University of Rhode Island is an investment that would pay huge dividends for the state.

The top 11 political families of Rhode Island.

The Barrington Town Council plans to vote on a proposed ban to plastic bags at its meeting tonight.

State sales taxes increase today on dog grooming and clothes that cost more than $250. People who purchase such goods and services can generally afford to pay the difference.

A North Kingstown resident has a sign in their yard that reads: “We Live Next to A Child RAPIST.” North Kingstown Patch has found no evidence that the accusation is true.

New York Times: The Party Politics of the Father-Daughter Dance

Mitt Romney, as governor of Massachusetts: “we’d be a lot better off in this country if we had European gas prices.”

This website, and its previous editors, have long debated what is better for the state and the Capital City at the Port of Providence: a working waterfront or new mixed-use development there. What do you think?

New Ideas? No Thank You


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Earlier this month, the Rhode Island Foundation held a big conference that said it was intended to generate ideas for moving the state’s economy forward. Yesterday, I received a note about the “New Leaders,” a group purportedly about bringing new ideas to the management of our state.  (This is apparently a different group from the “New Leaders Council” though it’s hard to tell from the rhetoric.) The Rhode Island Public Expenditure Council put out a report last week about its new ideas for reforming the state’s economic development apparatus. All these new ideas!  Sounds great, no?  Well, in a word, no.

Wht’s the problem with new ideas, you might ask?  Isn’t our poor state in dire need of some?

Well, yes and no. There are a million ways to change the way government does business, and hundreds of thousands of them would make our state a better and more prosperous society. But of those million ideas, there are only a paltry few that won’t gore someone’s ox when transformed into actual policy changes.

Now I think there are plenty of oxen out there that we would do well to gore, repeatedly. For example, I happen to think that the state and all its cities and towns pay too much for the financial services they need and that there are plenty of more economical ways to get those services that would benefit our state’s economy, too. But there are bond counsels, investment advisers, bankers, and tax credit brokers out there who would likely disagree with me, some strenuously.

Or we could stand to tax the wealthy of our state a little bit more. These “job creators” have created precious few jobs in exchange for the hundreds of millions of dollars of tax breaks we’ve awarded them over the past 15 years. Or perhaps we could look into ways to discourage the kinds of suburban development that cost so much to service, or at least make the developers pay the true costs to our communities. Or how about just guaranteeing that children in our poor cities have the same opportunities in their public schools as the children in the rich suburbs? That’s not a new idea, but it’s a good one.

There are plenty more ideas like this, but rather a lot of them have the disadvantage of inconveniencing some folks at the top of the heap: bankers, lawyers, real estate developers, rich people.

Many of those same people have their own list of ideas, many entries in which are different from mine. They routinely present them in anodyne language, calling them “tools” for example, or “innovations,” or “new ideas.”  Unfortunately, they are often the same old oppression and exploitation, with a different label.

For example, you routinely hear that cities and towns need “tools” to control their costs. Well, yes, in a world where those cities and towns aren’t getting the state support they need to pay for state-required services, they obviously need to be relieved of the requirements or given more money. The Assembly’s refusal to face that choice honestly has already led to one bankrupt city and will likely lead to more before long. But the “tools” in this case are not as morally neutral as the word would suggest. Most of the components — cutting pay, cutting pensions, cutting jobs — are just ways to turn decent jobs into poor ones, and to lower the level of services we get. But calling the proposals “taking away pay and benefits from workers especially those in the poor cities” or “paying teachers less” doesn’t sell as well as “tools.” Admitting that these “tools” will exacerbate the difference of opportunity in our schools, putting the kids in the poor districts even farther behind the kids in the wealthy districts just isn’t as pleasant as looking at the nice effect the tools would have on budget numbers.

The sad truth is that the best ideas are likely to provoke conflict. Many good ideas already have. Rhode Island is not stuck in economic neutral because of a dearth of ideas. We are awash in good ideas, but people with power find many of them too threatening to consider seriously. Good ideas are not only worth fighting for, they usually require fighting for.

The title above is a bit of a joke; new ideas should always be welcome. We learn and improve our world by seriously considering them. But though it’s important to foster a climate where good new ideas are developed and can get a hearing, they are absolutely not the way forward for our economy.

What is?  The first step to overcome our economic malaise is not to come up with new ideas, but to insist that the old ones be evaluated honestly. Did tax cuts actually create new jobs?  Did developing all our open space make us more prosperous?  Did cutting education really help our economy?  Did ending welfare relieve pressures on the state budget?  Did cutting state aid to cities and towns actually cut overall taxes?

Straight and honest answers to these policy questions will be worth a million new ideas. Unfortunately for all of us, House leaders seem to be committed to never considering the merits of their tax policies, and Senate leaders seem committed to never considering the merits of their policies about local funding and property taxes. Few suburban town councils in the state seem willing to push back against developers seeking to build on whatever open space is left. Fear of admitting error drives our leaders harder than intellectual honesty.

Until we have leaders willing honestly to confront questions raised by policy — especially policies they championed — and consider their implications with an open mind, all the new ideas in the world won’t help us one bit.