Category Archives: Taxes

Another low ranking for RI

Not to sound like a broken record, but is this any surprise?  From Ernst and Young:  Rhode Island has the 49th worst “tax burden on new investment” in the country.

If you are a little sad because we came in second to the last, don’t worry, if Chafee’s proposal to increase taxes on these and other items goes through, we can achieve 50th! (or 51 if you count DC)

Tax Day Rally

Somebody has to sell it

After yesterday’s showing at the State House where business leaders from all corners protested against the Governor’s proposed budget, it looks like EDC director Keith Stokes has the difficult job of selling it on the streets.  Here is the schedule for his chamber of commerce tour.  If you ever wondered if the EDC is looking out for the interest of the state or simply the salesforce for the governor’s “Winner Picker” agenda, you need look no farther for proof.

How Will Governor Chafee’s FY2012 Budget Impact RI Businesses? 

Businesses are asking how Governor Chafee’s Fiscal Year 2012 proposed budget will impact them.  The Rhode Island Economic Development Corporation invites you to learn more about the Governor’s budget and what it means for Rhode Island businesses.

RIEDC Executive Director Keith Stokes and a representative from the Rhode Island Department of Revenue will give an overview of the budget and provide detailed information and answer your questions about Governor Chafee’s Businesses Tax Competitiveness Proposal which includes:

a) reduction of the corporate income tax rate;

b) lowering and restructuring the minimum corporate tax/franchise fee; and

c) reduction and modernization of the state sales tax.
Some of the key questions that will be addressed include:

a) How will changes to the minimum corporate/franchise tax help small businesses?

b) How will the Governor’s tax proposal help retain and attract businesses in RI?

c) What are the impacts of the proposed change to the sales tax?

Speaking Engagements (scheduled to date)

April 21, 2011
Noon
Hosted by the Newport Chamber

Newport Harbor Hotel and Marina, 49 America’s Cup Ave., Newport
For more information or to register click here.

April 22, 2011
8:30 a.m.
Hosted by the  Central RI Chamber

NE Tech, 2480 Post Road, Warwick
For more information or to register, please contact the Central RI Chamber at 401.732.1100

April 27, 2011
8 a.m.
Hosted by the Northern RI Chamber

Kirkbrae Country Club, 197 Old River Road, Lincoln,
For more information or to register click here.

April 29, 2011
Noon
Hosted by the South Kingstown Chamber

South Kingstown Chamber, 230 Old Tower Hill Road, Wakefield
For more information or to register click here.

May 4, 2011
8 a.m.
Hosted by the North Kingstown Chamber

Pelly’s 19th Hole, 615 Callahan Road, North Kingstown
For more information or to register click here.

May 6, 2011
5:00 p.m.
Hosted by the East Greenwich Chamber

Location: East Greenwich Yacht Club
For more information or to register please contact the EG Chamber at 401.885.0020.

May 12, 2011
8:30 a.m.
Hosted by the Charlestown and Greater Westerly/Pawcatuck
Chambers of Commerce
Location: Shelter Harbor Inn
For more information or to register please contact the Greater Westerly Pawcatuck Chamber at 401.596.7761

May 18, 2011
8 a.m.
Hosted by the Narragansett Chamber

Location: To Be Determined
For more information or to register please contact the Narragansett Chamber directly at 401.783.7121

More dates and locations to be announced.

Event information is subject to change. Please register with the appropriate Chamber of Commerce to get updates regarding these talks.

Selling a stimulus bill of goods

Our friends at Americans for Tax Reform remind us of promises made, but not kept, by the president when he was selling the Stimulus Act, and a group of people doing something about it.
Promise: Absent an infusion of “stimulus” cash, unemployment would skyrocket to 8 percent.
o       Two years later: Over the past 21 months, unemployment has yet to drop below 9 percent, with over 150 economists urging the President to stop his spending binge to spur real economic growth.
Promise: Using the creative, but totally unverifiable metric of jobs “saved or created” the President claimed the “stimulus” plan would “save or create” 3.5 million jobs.
o       Two years later: the economy has almost 6 million fewer jobs than the Administration promised it would with the passage of the “stimulus” package.
Promise: “…every American will be able to go online and see where and how we’re spending every dime.”
o       Two years later: After an $18 million overhaul, Recovery.gov remains as useless as the day it first launched, unable to track where federal funds have gone. Between the White House, Congress, and agencies tasked with monitoring “stimulus” funds, no consensus has been made on how much of the “stimulus” has been spent. Estimates of funds left over range from $5 billion to $160 billion.
Promise: The federal infusion of cash would shore up state budgets that had fallen victim to a struggling economy.
o       Two years later: Not required to face their fiscal reckoning from overspending, state and local budgets accepted “stimulus” funds from the federal government, increasing obligations at a time they should have been cutting their bottom lines. As a result, the states face a $72 billion shortfall heading into 2011 and are scrambling to fund the promises made with short-term “stimulus” handouts.
Americans for Tax Reform is joined by Let Freedom Ring, Restore the Dream Foundation and a strong coalition of activists in urging Congress to rescind all of the unspent “stimulus” money. The RESET Act, sponsored by Rep. Sean Duffy, would send all unspent “stimulus” funds back to the Treasury for deficit reduction. The language of this bill has been included in the Continuing Resolution, currently being debated on the House floor. Sign the petition today to tell Congress to DEFUND THE STIMULUS.

In case you missed it

In case you missed the debate with Bill Felkner and Tom Sgouros on Newsmakers, we have posted the video and the extended interview below.  Enjoy!

Initial interview (second half of show)

Extended interview.

NEA Yardstick – a few inches short

If your child came home with a report card that simply said, “Has Improved,” would you be satisfied with that as an accurate description of their education? Wouldn’t you want to know how much of an improvement there was, how it compares to the past, other students in the class, or even how it compares to the competition they will face in our global economy?

That non-descript accounting is exactly the kind of sale pitch Pat Crowley used in his commentary, “Deconstructing corporate myth that taxpayers are fleeing the state” (January 10), when he claimed that Rhode Island’s onerous tax policies are NOT forcing people and wealth to leave the state. His pitch contains a limited perspective that doesn’t compare our state to the rest of the country.

The Ocean State Policy Research Institute will be releasing a comprehensive report called “Leaving Rhode Island” later this month that will address this issue, but Mr. Crowley’s commentary necessitates a sneak peek now because the data presented in our report provides the entire picture – not selectively picked data that gives a skewed vision of our state.

Mr. Crowley supports his claim that people are not leaving the state by saying, “Rhode Island’s population is the highest it has ever been.” Wait. Isn’t the population of the entire country “the highest it has ever been”? Yes. So, the question for critical thinkers to ask is, how does Rhode Island’s population growth, an indicator of economic vitality, compare to the rest of the country?

Overall, the country saw a 9.7% population growth over the last decade. Rhode Island increased its population over that same time 0.4%, the lowest rate of growth in the nation. Only Michigan, the sole state with a population decline, did worse. Mr. Crowley has pinned a 49th place ribbon on Rhode Island and wants us to consider ourselves winners.

He goes on to claim that our tax climate has not sent wealth out of the state either because the data he is looking at showed that “Rhode Island added high-income taxpayers in the middle years of the decade.”

Putting aside his limited view of the timeline, we must again compare our state to others so we can see how effective we are in relative terms. But most importantly, we must also look at the net result of wealth migration. While people are moving into the state, others are moving out. Evaluating the difference between those two groups can be revealing.

Between 1995 and 2007, the most current IRS data available, people leaving the state made on average much more money than did the people moving into the state. The amount of total net income (in–migration minus out-migration) leaving the state during that period averaged $78,468,000 every year.

Compounding this figure over the thirteen years examined shows that the state has cumulatively lost $4.6 billion in income and $540 million in state and local tax revenue due to out-migration. The bottom line is this: Yes, Rhode Island has an increasing population with an increasing income. Unfortunately, when compared to the rest of the country, we are doing so very poorly and it is hurting our economy.

I don’t know what’s worse, Mr. Crowley trying to fool the people with misleading statistics or the fact that this is being perpetrated by the same people who claim to help teachers instruct students on critical thinking.

The last error Crowley made in the piece was when he claimed that people who fear the loss of high income taxpayers in the state are only “looking to cut taxes on the elite and shift the burden of paying for government onto the backs of the middle and working classes.”

No, we don’t want to shift the burden anywhere. We want to remove the burden. We must enact policies that show our state is serious about attracting middle-class and wealthy people, along with their human and capital resources.

We propose many solutions in our various reports, but we cannot have reasonable dialog when those on the other side continue to put their head in the sand and refuse to see the problem. People and wealth are leaving Rhode Island because our tax structure is not competitive. OSPRI’s study, “Leaving Rhode Island,” being released this month, will make that fact crystal clear.

Read before you leap

So the folks at RIFuture.org received our email blast touting the release of our new report “Leaving Rhode Island – Policy Lessons from Rhode Island’s Exodus of People and Money” and apparently felt embolden enough (or scared enough?) to take pot-shots at the study.  In particular they have a problem with this one bullet points:

“From 1995 to 2007 Rhode Island collected $341.3 million from the estate tax. During the most recent year, the state only collected $27 million.”

Well, that email was purposively designed to be a teaser since this was an invitation to hear about the full study.  So, we thank them for the added publicity and controversy.  And to help fuel the fire, that sentence was actually a continuation of the previous point which was put more succinctly by the pull-quote on that page:

“From 1995 to 2007 Rhode Island collected $341.3 million from the estate tax while it lost $540 million in other taxes due to out-migration.”

Of course, not having the full study, they did not see the pull-quote which leads to today’s policy lesson—don’t critique something until you’ve read it.