Senator Alves’ Latest Corporate Tax Proposal
Senator Stephen Alves (D – West Warwick) has proposed a graduated tax on gross corporate revenue.
Moving swiftly (because, obviously, Senator Alves did also) past Rhode Island’s already repellent corporate tax climate and the fact that the budget crisis will not be solved by raising taxes of any sort, by the senator’s own numbers, a full 17% of corporations in Rhode Island which do not presently make a profit in this higher bracket would get entangled in his net.
A couple of months ago, when he proposed, to a chorus of bronx cheers, that the minimal corporate tax be doubled, the senator stated that 94% of corporations in Rhode Island pay “only” the minimum – $500 – corporate tax. What this means is that 94% of Rhode Island corporations either do not make a profit at all or only make a profit that equates to a maximum of $500 in corporate taxes – $5,555.
Yet the senator stated that under his proposed new tax structure, 77% of Rhode Island corporations would continue to pay “only” the $500; the rest would pay more. We established that presently, 6% of Rhode Island corporations make a profit above the $500 tax mark. 94 – 77 = 17. Therefore, 17% of Rhode Island corporations would be bumped into a higher tax bracket, not because they made any more money but simply because Senator Alves wants more money from them.
The Senator indicated on the Dan Yorke Show today that one of the reasons he is proposing this revision is because some corporations are cheating (my word) on their taxes. If this is so, the solution is audits and an enforcement of existing law. It is not to commit the legislative equivalent of hiring a plane to sky-write:
Attention, domestic and out of state corporations. Our tax structure used to be really bad. Now it’s really REALLY bad. (You still want to be here, though, right?)