At a hearing last night, many spoke in favor of Rep. Maria Cimini’s legislation that would raise income taxes on Rhode Island’s richest residents as a way to raise revenue and encourage job creators to lower the state’s unemployment rate, and I chose three to feature because they represent a wide variety of reasons why it makes sense for Rhode Island to take proactive steps to better fund government.
The bill would raise the income tax on those who earn more than $250,000 from 5.99 to 9.99 and that rate would decrease by one percentage point for each percentage point that the state’s unemployment rate drops. It would raise some $132 million in additional revenue.
So this is a penalty tax or a fine even. You’re saying to the business community, “If you don’t hire, we’ll raise your taxes.” That’s what you call tax equity? Unemployment was OVER TEN (10) PERCENT before the highest rate was reduced from 9.9. What is the evidence that this will inspire hiring? The fact that they were firing at the previous 9.9 percent? Wow!
It’s a rather silly bill (tying income tax to unemployment is nonsensical), but just let them pass it so that they can’t blame everything wrong with the state on the flat tax anymore. I’d say that it might inspire them to take some responsibility for the atrocious business climate in Rhode Island, but we all know that isn’t true – it’ll just shift to: “If only the flat tax hadn’t put us at such a disadvantage,” etc., ad infinitum. Businesses have laid out the reasons, again and again, why they are choosing not to locate in Rhode Island, but what do they know about their own incentives?