Brewster: Raise Taxes, Don’t Cut the Budget
Poverty Institute Executive Director Kate Brewster says the solution to the budget crunch is higher taxes, not cutting the budget:
• Restore the tax on long-term capital gains and freeze the “alternative flat tax,” both of which primarily benefit a handful of very wealthy taxpayers, many of whom are not even Rhode Island residents. There is no evidence that either of these provisions have grown jobs or revenues in our state. These two measures together could recapture close to $50 million.
• Conduct a careful review of the costly tax breaks, exemptions and credits that have been granted over the years and apply the “prove it or lose it” test to determine if they have achieved their purpose, are cost effective and/or affordable. Eliminate those tax expenditures that fail this test.
• Expand the sales tax to keep pace as the economy shifts from goods-based to service-based.
Well, she’s been consistent. The first two items can be placed squarely in the “class warfare” pile. You know, the rich don’t pay enough, etc. Heard that one before.
But the last one will hit all Rhode Islanders, not just “the rich.” The expansion of the sales tax Brewster is talking about could mean taxing services–doctor visits, legal services, tree cutters, landscapers, etc. That’s what she means by “keeping pace” with a “service-based” economy. Oh, I’m sure there will be some promises that “essential” services won’t be taxed….for now. But once the toe is in the door, and the budget continues to crunch, we can be sure that somebody will look for more “innovative” ways to raise, ahem, “revenue.”