May 5, 2013 – RI Future

Rep. Larry Valencia is charging hard at injustice and promoting progressive values in the General Assembly.

This Democrat serving Hopkinton, Exeter, and Richmond voted ‘Yea’ on marriage equality, is a cosponsor of the marijuana legalization bill, the lead sponsor of the repeal of Voter ID, cosponsors Rep. Maria Cimini’s Tax Equity bill, and has also introduced a tax equity bill of his own (H5805) that would actually bump Rhode Island’s top earners tax rate by 4 percent. Cimini’s bill (H5374) calls for a 2 percent bump. Valencia is calling the bill the “Double Cimini.”

Specifically, Valencia’s bill would raise tax rates on individuals earning over $200,000 and couples earning over $250,000 by 4 percent. Valencia estimates that the rate increase would raise an additional $130 million-plus in annual revenue for the state.

Valencia would like the additional revenues to be put towards creating an Office of Inspector General to improve departmental oversight in the state, shoring up social programs for the developmentally disabled, and relieving some of the burden on those who are on fixed incomes, the elderly, and Rhode Island’s veterans.

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At a press conference on Wednesday, Valencia touted the bill as a way to, “correct the current imbalance of tax burden that has been place on working families and small businesses with a fair and modest solution, while also addressing our revenue crisis.”

In his position on the House Finance Committee, Valencia is privy to some downright scary fiscal projections for the state. Some show that the states structural deficit could balloon to nearly $500 million for fiscal year 2018. “We need some changes in the revenue side, as well as some judicious cuts in spending.”

“Some of our leaders have maintained unsustainable tax breaks for the wealthy based on the premise that it would bring jobs back to Rhode Island. After 15 years and millions of dollars in tax cuts for the wealthy, our state has one of the highest unemployment rates in the country,” Ocean State Action’s Kristina Fox offered, “to put it bluntly: it didn’t work and it is time to try something new.”

The Young Democrats of Rhode Island are supporting this bill. Alex Morash called income tax reform, “…vitally important to complete a picture of Rhode Island that works for everyone. We’re not asking for a handout. We’re asking for a fair shot in an economy that works for all Rhode Islanders.”

One would think that local mayors, administrators, and council members would be clamoring to support this bill, especially in Rhode Island’s most distressed communities, but bill proponents have yet to approach local legislators for support. “I don’t know if we’re at that stage yet. Building support for legislation like this takes time,” Valencia said. This is the third year that he has introduced the bill.

“Equal protection from environmental hazards cannot happen in Rhode Island without tax fairness,” said Amelia Rose, Director of the Environmental Justice League of RI, “Our Department of Environmental Management is underfunded and the budget continues to be cut. This has slowed the remediation of brownfields in urban areas, which directly affects the quality of life of the predominantly immigrant and low-income people that live in these areas.”

Local policy researcher and sometime RI Future contributor, who crunched many of the numbers in the bill, offered these points. “Opponents of tax equity, what they’re implicitly saying, is that this problem of appeasing rich people is the biggest problem that we’re facing today. My question to them is: Are you sure?”

Valencia, not satisfied with simply increasing revenue, has also introduced legislation that would create the office of an Inspector General in the state. The office would provide oversight to all divisions of government in the state, in an effort to make sure that the investments that we do make are prudent and returns on those investments are realized.

In past posts, I have explained actions that businesses–usually large corporations–have taken that are decidedly contrary to the interests of the general public. For this, commentors have claimed that I’m anti-business, that I’m using scare tactics, I’m just a socialist, or some combination thereof.

However, in the news over the past month or so we have seen two excellent examples of Business Behaving Badly. The first, of course, was the decision of MetLife to summarily fire all of its Life Administration employees here in RI and other parts of the Northeast and across the country, in order to move those jobs to North Carolina. MetLife is firing these people in order to pad its already high profits: $1.4 Bn for 2012. That seems to be contrary to the interests of the general public.

And yes, these people are being fired. There is no other word that accurately describes what is happening. Fired. For no fault of their own. Without cause. With no justification other than it better suits Met’s interests. A lot of these people have worked loyally for Met for periods often measured in decades. The reward for loyal service is to be fired.

How does that fit with the propaganda that the free market will take care of employees better than any government? Answer, it doesn’t. What it does do is illustrate to perfection how a corporation will take care of its own needs, regardless of the number of lives that are damaged in the process. It’s all about increasing the benefits that flow in a torrent to those already at the apex of the financial pyramid.

The second example is the explosion of the fertilizer plant in West, Texas. Now, from what I can gather, this plant was not part of some multinational corporation. A company like Met could have bought and sold it out of the spare change in the couch cushions. But it was a business, run for profit. One way of increasing profit is to cut corners on safety issues. Despite the fact that ammonium nitrate was the explosive of choice used by Timothy McVeigh in the Oklahoma City bombing, those in charge of the fertilizer plant did not consider this a safety risk, Records indicate that the risk that concerned them most was the possibility of a leak of ammonia gas. This would be a bad thing, but not catastrophic.

So the company took no steps to mitigate the possible risk. Why not? Because they did not see the need, and taking steps would have cost money.

Now, it appears that no one in the town particularly blames the company, and the company was certainly not a rapacious corporation hell-bent on increasing profit. Still, the fact remains that no safety precautions were taken, and fifteen people are dead because of the lack of precautions.

The third example is the worst and most blatant of all: the collapse of the building in Bangladesh.

One thing we all hear about is the need for ‘common sense’. Doesn’t it seem that ‘common sense’ should include taking precautions to reduce the risk of a fire at a plant that stores large quantities of highly-explosive material? If you’re making dynamite, shouldn’t you build risk-mitigation into your plans? And ammonium nitrate, in the quantities on hand at the fertilizer plant is every bit as dangerous as dynamite. You can take Timothy McVeigh’s word on that. Doesn’t ‘common sense’ tell you to build a building so it won’t collapse?

It also appears that the fertilizer company may not have actually broken any laws. That also seems to be part of the problem. The plant is in Texas, and Texas prides itself on being a land of lax regulation. So fifteen people died so Texas could maintain its macho image of ‘hands-off’ conservatism. IOW, it’s more like Bangladesh, and less like the rest of the US that foolishly insists on standards. More, 68 people have died in mining accidents in the new millennium. The common thread of all these deaths is the lack of safety precautions. Why did the companies in question not take proper precautions? Because they cost money, and no one made them take the precautions.

In many ways, the impression is that the West Fertilizer Company was actually a fairly benign employer. In many ways, that only makes things worse. If this is how a well-intentioned company acts, how much worse are those actively looking for corners to cut?

This is how business will operate in an unregulated, or lightly-regulated market. Most businesses will be responsible, but there will always be a few who don’t. And when these businesses behave irresponsibly, and profit from this lack of concern, others will mimic that behavior and start cutting corners, too. And people will die. And it doesn’t have to be a business like mining, or fertilizer production with their built-in dangers; it could be the result of locked or nonexistent emergency exits, as happened in the Hamlet, NC chicken plant fire where 25 people died, or the even more horrific Triangle Shirtwaist fire, which killed over 140 people.

We are told that regulations in the US are too onerous. That they cost businesses money, and so jobs. We are told we need to lighten the regulatory burden on business, so that we can create jobs. IOW, we need to become more like Bangladesh, with its light (non-existent? Certainly not-enforced) regulations, no unions, and starvation wages for its employees.

You get what you pay for.

This is what happens when businesses are left to police themselves. Things are no different now than they were a century ago.

Day: May 5, 2013

Rep. Valencia continues push for tax equity

Businesses behaving badly