Estate Tax – RI Future

May 11, 2016

State estate taxes are vital tools for broadly shared prosperity

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A new report released this morning by the Center on Budget and Policy Priorities (CBPP) emphasizes the importance of state estate taxes as tools for broadly shared prosperity and as a means to ensure that the very wealthy don’t avoid taxes by sheltering their wealth.

This report comes at an opportune time for Rhode Island, just a week after learning that policymakers are considering increasing Rhode Island’s estate tax exemption from the current $1.5 million to $2 million, a move that would benefit the heirs of fewer than 100 estates.[1] As seen in Figure 1, the increase in the estate tax exemption enacted two years ago already has significant negative impact on state revenues.

As Rachel Flum, Executive Director of the Economic Progress Institute, notes, “We face a choice: we can either invest in the things that help our communities thrive and all of us prosper, or hand yet another tax break to a few of our state’s wealthiest people.” Changes to our estate tax have already compromised our ability to make critical investments in the Ocean State. Increasing the estate tax exemption from $1.0 million to $1.5 million in the 2014 General Assembly depleted revenues by $8.4 million in 2015 and by $6.1 million already in 2016, according to the Department of Revenue.[2]

The CBPP report, State Estate Taxes: A Key Tool for Broadly Shared Prosperity, calls on states that have repealed their estate taxes to reinstate them, and suggests that the eighteen states that have estate taxes in place (including every state in the Northeast except New Hampshire) consider improving them. At $1.5 million, the Rhode Island estate tax exemption falls midway between the $1.0 million exemption in Massachusetts, and the $2.0 million in Connecticut.

The CBPP report emphasizes three compelling public policy purposes that result from estate taxes:

Providing revenue for investments that promote a strong economy. Estate tax revenue supports services that make a state an attractive place to do business and live.
Reducing inequality. The vast majority of taxpayers would never owe estate taxes. These taxes are paid by a small share of very wealthy families — those most able to afford them.
Taxing income that would otherwise escape state taxation. Without an estate tax, many unrealized capital gains go untaxed at the state level. This happens when an asset that has increased in value is not sold during the owner’s lifetime, leaving the heirs to gain the profit.

Report author, Elizabeth McNichol, emphasizes the price we pay when we erode state revenues:

You can’t get something for nothing. States that have reduced or eliminated their estate taxes have less money for public investments, so they are seeing higher tuition at public colleges; cutbacks in teachers at K-12 schools; and deteriorating roads, bridges, water treatment facilities, and other public infrastructure.”

Important investments in tens of thousands of Rhode Island’s low- and middle-income working families – such as increasing the state earned income tax credit to 20 percent of the federal credit, and helping families pay for child care–should take priority over tax breaks for a few dozen of our wealthiest families. These investments are particularly important given Rhode Island’s overall tax system, which is “upside down”. The more money you make the smaller share of your income you pay in state and local taxes. A robust estate tax helps to reverse that upside-down tax system, as do changes at the lower end, such as increasing the state EITC.

Douglas Hall, Director of Economic and Fiscal Policy at the Economic Progress Institute notes that “Preserving the estate tax at its current levels gives us revenues needed to give Rhode Island working families a boost, strengthen our economy, and invest in education and infrastructure, while making our tax structure more fair, and preventing those most able to pay from avoiding taxes on their accumulated assets.”

[1] Based on the most recently available data, after reducing by more than half the number of estates subject to the estate tax via changes adopted in 2014, only about 86 filers would remain, 39 of which would see their estate tax completely disappear if we were to raise the exemption to $2.0 million

[2] Revenue projections from the estate tax, seen in Figure 1, incorporate the revenue impact from changing the exemption level, but also reflect the number of estate tax filings, which vary from year to year.

May 4, 2016

Legislators should prioritize Rhode Island workers

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On Friday it was reported in the Providence Journal that Speaker Mattiello’s budget priorities include reducing the estate tax by increasing the threshold for paying the tax from $1.5 to $2 million at an estimated cost of $4.3 million, as well reducing the corporate minimum tax from $450 to $400 at an estimated cost of $3.2 million. Reducing the estate tax and corporate minimum tax will provide little benefit to the overwhelming majority of Rhode Islanders and are not a good use of public funds.

“We hope that lawmakers will not reduce state revenues by over $7 million for tax changes that would benefit a handful of Rhode Islanders and businesses,” said Rachel Flum, Executive Director. “There are many wiser ways to use $6 million to support thousands of working Rhode Islander and to ensure that businesses have the workforce they need to succeed.”

The state increased the estate tax threshold in 2014 effective January 2015, essentially increasing estates exempt from paying the tax from $1 million to $1.5 million and reducing the tax on higher income estates. The estimated revenue from the estate tax in 2014 was $43.6 million, dropping to $34.2 million in 2015, a 20% loss of revenue after the change.

Further increasing the exemption to $2 million would benefit approximately 100 estates, of which 35 would not have to pay any tax at all.

In stark contrast, increasing the EITC to 15% of the federal credit, as proposed in the governor’s budget would put $4.4 million into the pockets of 83,000 working Rhode Islanders. Increasing it to 20% as proposed by bills pending in the house and senate would provide an additional economic boost of $8 million to the direct care workers, servers, salespeople and other Rhode Islanders who earn low to moderate wages. These state investments are then recycled directly into local economies.

“The estate tax is a vital tool for broadly shared prosperity,” added Douglas Hall, Director of Economic and Fiscal Policy at the Institute. “Our analysis shows there is no good public policy reason to reduce state revenue by reducing the tax that is paid by only a small number of heirs of large estates. The state’s priority should be to help struggling working families.”

One such priority is to help working families pay for child care assistance so they can enroll their young children in quality early learning programs and know that their older children are in a safe place after school. A pilot program allowing working families who are receiving child care assistance (income below 180% FPL) to remain eligible as their income rises to over twice the poverty level is set to expire in September, 2016.

As of March 2016, just over 400 children are enrolled in the pilot. Trend data since the onset of the program in October 2013 shows that the pilot has allowed parents to have a glide path to earning higher wages since around half of the families have income between 200 and 225% FPL and half have income between 180 and 200% FPL. It is estimated that making this “exit income” permanent would cost $1.6 million for FY 2016, an investment that not only helps working families but supports the child care sector. And with the lowest eligibility limit for child care assistance in New England, policymakers should also consider increasing the “entry income limit” from 180% FPL to at least 200%.

Just as there are far wiser ways to invest in our workforce, there are wiser ways to help businesses. The Statistics of Income for 2014 shows that 91% of Rhode Island businesses paid the minimum corporate tax, including 8,000 companies with gross receipts that total more than $10 million. Last year companies were given a break – a reduction of the minimum corporate tax by $50, from $500 to $450, taking revenue the state needed to pay for the public services and infrastructure that businesses use and rely on. Another $50 reduction is unlikely to significantly impact individual businesses, while a $3 million investment in workforce training for the 83,000 Rhode Islanders who lack a high school diploma and/or are in need of English language services would benefit all businesses who are looking for workers with basic skills.

May 2, 2016May 2, 2016

Time for progressives to Bern down Mattiello’s estate tax reform

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As the results of last Tuesday’s primary show, RI Speaker of the House Nicholas Mattiello is seriously out of step with Rhode Island voters. Progressives in this state demonstrated the kind of change they want, yet instead of course-correcting, the speaker is doubling down on policies Tuesday’s vote clearly rejected.

One key reform Mattiello has his eye on is lowering the estate tax, the tax levied exclusively on dead millionaires. In the ProJo, Mattiello said he is “‘hearing from successful folks in Rhode Island pretty regularly lately’ that, without assistance, ‘they will be forced to leave the state,’ adding that he is going to ‘work hard to get [this] done in the budget.’”

This isn’t a new idea for the Speaker. Back in January, at the 2016 Rhode Island Small Business Economic Summit, Grafton H. “Cap” Wiley IV told Governor Gina Raimondo, Speaker Mattiello and a room full of government officials and small business owners that “it would be great if we had enough revenue to get rid of the estate tax” or if we don’t have enough revenue, “look at an increase in the exemption.”

“That’s something I’ve got my eye on,” said Mattiello.

Here’s the problem: Lowering or eliminating the estate tax does nothing for the economy. It doesn’t lead to greater entrepreneurship, doesn’t create jobs and doesn’t put money back into the economy. It’s a straight up giveaway to the 1 percent. And lest we forget, the care and comfort of the 1 percent has always been Speaker Mattiello’s primary concern. Remember his comment last year that his “well-to-do” neighbors don’t see any tax relief?

The suggestion that “successful folks” are being “forced to leave the state” because of the estate tax is frankly idiotic. This economic hokum has been debunked time and again, yet our speaker clings to this lie to justify giving more money to the already rich.

To quote the speaker, “that discussion has to stop.”

Let your legislators know that you oppose these tax cuts for the rich. Tell them what their priorities should be. Remind them of the results of Tuesday’s primary, and let’s start using our newfound progressive political power to effect real, positive change.

February 11, 2016February 11, 2016

Sleepless nights and cognitive dissonance at the State House

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Speaking at the Greater Providence Chamber of Commerce (GPCC), alongside Senate President Teresa Paiva Weed and Governor Gina Raimondo, Nicholas Mattiello proudly ticked off a list of his tax cutting accomplishments since becoming Rhode Island’s Speaker of the House.

We’ve reduced the corporate tax rate in Rhode Island.

“We exempted sales tax on energy costs to assist businesses.

“We raised the exemption on the estate tax to keep successful folks in the State of Rhode Island.

“We eliminated the social security tax on many Rhode Islanders so we can assist the middle class after a lifetime of commitments so that they can stay and thrive in Rhode Island.

“We eliminated tax on radiology services to assist that industry.”

Acting as the self-appointed Yin to Mattiello’s Yang, Paiva-Weed spoke about how the Speaker and Governor stood with her “to take some of the most difficult votes the General Assembly could take to cut the budget…

One of them was last year… and that was cutting $70 million from Medicaid. That was a hard vote…

“In addition, many of you in this room were not standing here cheering when we had to make those difficult votes to ensure the passage of pension reform. And that was a vote that quite honestly kept me up many nights, because it really did hurt people…”

“It really did hurt people.” Let that sink in for a moment.

“We raised the exemption on the estate tax to keep successful folks in the State of Rhode Island,” the Speaker had said, not five minutes earlier.

The message was as jarring as it was obvious: Tax cuts on the rich hurt people. Our leaders know this, but they don’t want to believe it. It’s called cognitive dissonance.

Beyond just hurting people, poorly targeted tax cuts do nothing to help the greater economy and instead impoverish a government’s ability to maintain infrastructure. Hence, RhodeWorks.

RhodeWorks will shift the financial burden of repairing RI’s roads and bridges onto trucking companies, who will maintain their profits by increasing the price of goods. This will burden the poor and middle class much more than it will the rich, who will be able to manage slight price increases by drawing on the extra money they keep through the tax cuts they’ve been granted.

Despite Paiva-Weed’s protestations, she has not cast “difficult votes”. A difficult vote would be one in which she stood up for those without power and against the money of the connected elite. A difficult vote would be one of compassion and courage.

No, the votes Paiva-Weed made were easy, because the people she hurt have no power to hold her accountable for their pain. Her conscience might bother her, but what good is a conscience when the corporate tax rate needs to be cut?

As for Mattiello, after he proudly listed his accomplishments, he said, “We have been laser focused on moving our economy forward and doing the kind of things that build economic wealth and growth and jobs in the State of Rhode Island.”

“And then I hear,” said Mattiello, pausing as the cognitive dissonance crackled through his brain, “that there’s a consensus that we have the worst roads and bridges in the country and it’s the leading concern of businesses. It’s the number one driving force for businesses in their decision making.” Another pause.

Mattiello’s pauses say it all. All that money he gave away to his well off neighbors was for nothing. All those cuts to pensions and Medicaid were for nothing and all those people hurt by these cuts were hurt for nothing.

Our leaders bought the lies of economic charlatans, gave away millions in tax cuts, impoverished our state and hurt people terribly, only to find that what was really needed was a strong infrastructure, an infrastructure we might have been able to afford if we weren’t crippling our economy by cutting the taxes of dead millionaires.

January 15, 2016April 30, 2016

The Estate Tax is a solution, not a problem

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At the 2016 Rhode Island Small Business Economic Summit (Summit), Grafton H. “Cap” Wiley IV told Governor Gina Raimondo, House Speaker Nicholas Mattiello and a room full of government officials and small business owners that “it would be great if we had enough revenue to get rid of the estate tax” or if we don’t have enough revenue, “look at an increase in the exemption.”

“That’s something I’ve got my eye on,” said Mattiello, offering to collaborate with the business community to do something about it.

The idea of reforming the estate tax came out of a previous Summit, said Wiley, and the important thing, he continued, looking towards Raimondo and Mattiello, is that, “you guys are listening.”

“Rhode Island ends up at the bottom of a lot of the ratings of taxes and business climate,” said Wiley, and though he did not specify to what ratings he was referring, two annual business climate rankings, the SBEC (Small Business and Entrepreneurship Council)’s Small Business Policy Index and ALEC (American Legislative Exchange Council)’s Rich States, Poor States, include the mere existence of a state level estate tax as a negative in their questionable formulas for determining a state’s ranking.

The problem, says economist Peter Fisher, is that “the estate tax – which is paid only by the ultra-wealthy – doesn’t affect economic growth.”

Fisher says that Rich States, Poor States author Arthur Laffer, “and his co-authors devote an entire chapter to estate and inheritance taxes, incorrectly tagging them as ‘job killers’ that ‘strangle economic growth.’”

Laffer and company assert that states with an estate tax are losing ‘enormous amounts of accumulated wealth,’ and that this wealth would have created jobs, alleviated poverty, and increased tax revenue, but they fail to explain how this would happen. The wealth held by retirees typically is not the kind of capital normally used in job creation. The wealth that drives prosperity consists of real assets: natural resources, plant and equipment, public infrastructure, human capital, technological knowledge. By contrast, large estates typically consist of real estate, stocks and bonds, mutual funds, and other financial assets which could be located anywhere in the world. The future use of those assets is unaffected by where the person who owned them died.”

So why would Mattiello be so eager to look at an idea that amounts to both failed tax policy and a giveaway to the mega rich? As Bob Plain showed, the last time RI messed with the estate tax, the burden of public services and infrastructure was shifted onto poor and middle class Rhode Islanders, allowing the rich and the mega rich to become richer still. These policies contribute to our ever increasing wealth inequality and pervert our democracy, tilting us ever faster towards an oligarchy represented by the likes of “Cap” Wiley, if we aren’t there already.

Citing an Economic Progress Institute (EPI) fact sheet, Plain wrote, “The clear winners are a small number of wealthy taxpayers whose estates will pay less in taxes and in many cases, nothing at all starting next year. The clear losers are tens of thousands of low- and modest-income Rhode Islanders who will pay more in taxes next year. Unemployed homeowners and renters are among the biggest losers, because they will no longer qualify for property tax assistance and are not eligible for the earned income tax credit (EITC). Many of the lowest-wage workers will also be negatively impacted by the loss of the property tax refund, even with an eventual boost in the EITC.”

“SBEC’s stated mission, says Fisher, “is to ‘encourage entrepreneurship and small business growth,'” but “its lobbying activities reveal a very conservative, anti-government agenda.” ALEC, “is a mechanism by which corporations pay substantial sums of money to draft legislation benefiting them.” Neither group has the interests of state economies or average citizens in mind when they advance their agendas under the guise of “economic research.” These groups are made up entirely of the oligarchic prosperous and their servile, deluded sycophants.

Our gullible state leaders are not searching for real economic solutions to our state’s budgeting issues, they are instead looking for the excuses they need to pass the legislation their corporate masters demand.

To truly help our economy and budget, instead of eliminating the estate tax we should be increasing it.

Also, do yourself a favor and familiarize yourself with Peter Fisher’s website:

January 14, 2016January 14, 2016

State leaders demonstrate their priorities, and it’s not you

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Our state leaders seem to care more about a handful of dead millionaires than they do about over a thousand living seniors and disabled people. Here’s a video, “Dueling Concerns,” that I think best illustrates the priorities of our elected leaders in state government.

The first person you will see in the video is Grafton H. “Cap” Wiley IV, speaking at the eighth Rhode Island Small Business Economic Summit last Friday. Our state leaders were there, on stage or in the audience, to listen attentively and take notes. One of the many tax policy ideas Wiley suggested was to eliminate the Estate Tax, the tax that only dead millionaires pay. House Speaker Nicholas Mattiello, responding to Wiley’s idea later in the program, promises that he will take a serious look at this idea.

The next person in the video below is Maxine Richman, co-chair of the Rhode Island Interfaith Coalition, speaking at the eighth Rhode Island Interfaith Coalition to Reduce Poverty vigil at the State House, held two days earlier. This event has been occurring at the State House for about the same amount of time that the Small Business Summit has been taking place at Bryant University. Richman also has a series of proposals for government leaders, including funding the free bus fare system for seniors and disabled riders. In response to Richman’s ideas, Governor Gina Raimondo shrugs her shoulders and asks, “That sounds great, but where will we get the money?”

Richman was advocating on behalf of some of the poorest people in the state. Instead of promising to really grapple with these ideas, Raimondo and Mattiello essentially said, “Sorry, the cupboards are bare.”

But in truth, this has nothing to do with how much money the State of Rhode Island has to spend, it has to do with government priorities. Dead millionaires count for something in the eyes of our leaders; the poor, the elderly and the disabled do not.

For years now, for instance, the Rhode Island Interfaith Coalition to Reduce Poverty has asked that the General Assembly do something to reign in the usurious PayDay Loan companies, all to no avail. Mattiello dismisses the harm such companies do to our communities as ideological in nature without irony, unable to see that it’s his own ideological fixations that are responsible for enormous suffering in our state. The PayDay loan companies fund a powerful lobbyist who happens to be a close friend and mentor to Mattiello.

Lowering or eliminating the taxes on dead millionaires is a policy that flows naturally from an ideology that Mattiello and Raimondo embrace. This ideology, that has no basis in economic reality, says that lowering taxes on the moneyed classes will “trickle down” to the rest of us, and magically fund RIPTA and increase the fixed wages of the poor and elderly. The fact that it doesn’t work this way, never has and never will, threatens the deeply held beliefs, ideologies, of our government leaders and those they are beholden to, who were aptly represented at the Small Business Summit.

At one point in his presentation “Cap” Wiley told the crowd of small business owners and politicians that “businesses don’t vote,” implying that such a state of affairs denies business people political power.

That’s a crock of self-serving shit.

Businesses don’t need to vote as long as they are able to buy the attention and loyalty of elected officials.

Here’s my suggestion: Raise the estate tax. Use the money to not only fund the free bus fare system, but to also raise the earned income tax credit for low income families to 30 percent. That will do more to get our economy cooking than lower taxes for dead millionaires ever could.

Here are some of the unedited videos.

Previous coverage of the 2016 RI Small Business Economic Summit:

Business leaders decide issues elected officials will pursue at economic summit

Previous coverage of the Rhode Island Interfaith Coalition to Reduce Poverty:

Interfaith Vigil at State House proposes ambitious poverty agenda

June 9, 2014June 9, 2014

Low income RIers pay for estate tax exemption

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The budget as proposed benefits wealthy heirs at the expense of low-income Rhode Islanders, according to an Economic Progress Institute analysis of the House Finance Committee’s revenue and spending plan released late last week.

The proposed budget would increase the exemption on the estate tax from $921,655 to $1.5 million while eliminating $3.9 million in tax breaks to low and moderate income Rhode Islanders. The budget lowers the Earned Income Tax Credit and eliminates a property tax refund.

“The clear winners are a small number of wealthy taxpayers whose estates will pay less in taxes and in many cases, nothing at all starting next year,” according to this factsheet put together by EPI. “The clear losers are tens of thousands of low- and modest-income Rhode Islanders who will pay more in taxes next year. Unemployed homeowners and renters are among the biggest losers, because they will no longer qualify for property tax assistance and are not eligible for the earned income tax credit. Many of the lowest-wage workers will also be negatively impacted by the loss of the property tax refund, even with an eventual boost in the EITC.”

According to EPI, if you are a Rhode Island taxpayer who dies with a million dollars, your heirs will owe $30,555 of their inheritance to the state. The proposed budget would eliminate the estate tax for everyone who dies with less than $2 million. Those heirs would owe $35,200.

On the other hand, the proposed budget would reduce the Earned Income Tax Credit overall. According to EPI: “Lawmakers are reforming the credit by reducing it to equal 10 percent of the federal EITC and making it fully refundable. This change is likely to result in larger refunds for some of the lowest-wage workers in our state, and some workers who did not receive a refund will now get to keep more of what they earn come tax time. Still, many modest-income EITC filers with relatively higher income tax liability will pay more in taxes as the credit is reduced.”

The budget plan also eliminates what is known as the “property tax circuit breaker.” This tax refund is for Rhode Islanders who earn less than $30,000 a year whose property tax rate is more than 3 percent of their household income. 40,000 renters and homeowners took advantage of this deduction last year for an average refund of $272, according to EPI.

“The $4 million being taken directly out of the pockets of low- income taxpayers is money that would have been spent right here in the Ocean State at local businesses,” said EPI Executive Director Kate Brewster. “On the other hand, high-income households don’t need to spend every dollar they have to meet their basic needs and are more likely to save their tax cut.”

April 12, 2014

Mattiello visits Woonsocket, but his tax-cutting agenda won’t help city

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As was reported by Jim Baron in The Woonsocket Call, newly elected House Speaker Nicholas Mattiello visited Woonsocket recently. While I only became aware of his visit after the fact, and was disappointingly not invited to the Rotary Club luncheon that he addressed, I should like to address the Speaker through this most public of forums, the interwebs.

Mattiello, with House Majority Leader John DeSimone in tow, was given a tour of the city by Mayor Lisa Baldelli-Hunt, and our delegation to the House of Representatives Reps. Stephen Casey, Bob Phillips, and Mike Morin. Stops on the tour included WWII Memorial Park – the only state park in the city – our barely breathing Diamond Hill retail district, Landmark Medical Center, The Plastics Group, and a visit to an Advanced Placement Government class at Woonsocket High School. After the tour, Baron reports that the Speaker said, “I got a good view of Woonsocket today. You’ve got some great things going on, but there is also blight in certain areas.”

That comment makes me wonder if the tour wasn’t a bit sugar-coated by the Mayor and our Representatives because, frankly, the entire city is suffering from blight.

Even the city’s swankiest neighborhoods – the North End and East Woonsocket – are rife with homes that have been abandoned due to the foreclosure crisis and skyrocketing property taxes. The two largest commercial plots in the Fairmount neighborhood -which happen to be directly opposite one another on the banks of the Blackstone – look like a warzone. The spectre of non-resident tenement and corporate development owners looms large on streets like 3rd Ave., Pond St., Chester St., and many others. The decline of the city is no more evident than on Main St., where one of the most historic buildings in the city, the Commercial Block, is slated for condemnation.

While addressing the Rotary Club, Mattiello stressed the importance of infrastructure and education saying, “We have to stop having an infrastructure that our citizens complain about,” and that, “A well trained, well-educated workforce produces more and makes us better citizens.” I agree with Mattiello on these points, but have to ask, isn’t the lack of state funding in both of these areas a major driver of the decline of Woonsocket’s roads, bridges, and education system?

Baron admits in the story that the crowd at the luncheon was, “heavy with businessmen and women,” and toward the end of the article writes that when Mattiello was questioned on taxes, he responded, “I’m looking at the corporate tax. I want to get rid of the inheritance tax cliff.”

This ranks among the top three most tone-deaf things I’ve heard fall from the lips of any politician. The top two are Mitt Romney’s “47 percent” comment, and George W. Bush’s, “Mission accomplished.”

First, most folks in Woonsocket, even businessmen and women, don’t give a damn about the corporate income tax. What Woonsocket businesses need – and I’d argue most businesses in any of Rhode Island’s four core cities – is property tax relief. Besides, if you look at the corporate tax returns in Rhode Island, the majority of businesses in Rhode Island aren’t paying anywhere near the 9 percent that is written into our tax structure.

Second, does anyone out there think that the inheritance tax “cliff” of $921,655 matters at all to people in a city where the median income is $39,000/year?

Mattiello also said that Woonsocket is, “…a city that needs our attention right now.” Let’s file this one under, “No shit, Sherlock.”

Woonsocket has needed attention, not only from the state, but from our own elected officials for the last 30 years. We needed attention way back in 1991, when a young Dave Fisher had to protest outside of Woonsocket High School to keep our sports, music, and arts programs funded. We needed attention when – then city councilor, now council President – Albert Brien, sold a tract of land on the Woonsocket/N. Smithfield border to developer who then poached Wal-Mart and Lowe’s from our Diamond Hill retail district. We needed attention when we crossed the threshold of state mandated affordable housing, putting an onerous strain on our city’s education and human services budgets. We needed attention when our only state park was falling into disrepair, yet the budget for DEM continued to be slashed. Where was the state support in these instances?

What makes Woonsocket’s situation even more maddening is the fact that, for 150 years, Woonsocket was a key economic and social driver in Rhode Island. It was a place where blue-collar folks could go to make a decent living, and maybe afford that little beach house in Matunuck. Unfortunately, since the decline of the manufacturing economy in the state, it seems that our state government has written Woonsocket off as not salvageable; talk about adding insult to injury.

Please forgive my cynicism and compound metaphor, but the state has all too often pulled the rug out from under Woonsocket while simultaneously shoving us under the bus. For as little faith as I have in our newly elected mayor, I have even less faith that our state government will – or even can – help to save the once vibrant city of Woonsocket.

January 9, 2012April 12, 2014

Meritocracy or hypocrisy?

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A friend of mine just had a tragedy in the family—his grandmother passed away. It has been difficult for him, but the good news is that his grandmother lived a rich, full, and happy life and died surrounded by a large and loving family.

But talking to my friend really got me thinking about some of the major assumptions that inform public policy in this country, particularly the idea that America is a meritocracy. My friend’s grandmother was a very wealthy woman, and she left her grandchildren each with substantial trust funds (and by substantial, I mean substantial — as in as much money as I will ever make in my entire life if I continue in the non-profit/community organizing field).

We might think that a nation as deadset against “free handouts” as ours would try to restrict this most extravagant of free handouts. But the reality is quite the opposite — the United States greatly subsidizes these kinds of handouts by taxing capital gains and estates at a far lower rate than any other industrialized nation in the world. What we say in this country, in effect, is that it’s more important to ensure that a friend of mine on one end of the socioeconomic spectrum get wealth he did not actually work for than, for example, another harder-working friend of mine be provided with bus passes so that he can get to school every morning without having to walk nearly three miles through the winter chill.

It’s just hard for me to understand how folks can claim that legitimate social services designed to help those constrained by structures of inequality will create dependence and a lack of initiative, but the ability to live comfortably the rest of one’s life without doing a lick of work is alright as long as its restricted to those who are already greatly privileged. If anyone can explain to me how that can possibly make sense, I’m willing to listen. Until then, I will remain confused.