Admitting What Must Be Done
Even just a hint that Governor Carcieri likes the notion of eliminating the income tax, almost as a philosophical matter, is enough to induce the fury of Johnathan Berard (emphasis added):
As a taxpayer, I’m mad because the state decided to go more than $33 million dollars over budget, but as a student, I’m absolutely furious that the solution to make up some of that loss is to take funding from state schools, necessitating tuition increases. This makes some of us losers on both ends! Part of the reason students like me go to schools like URI, RIC, and CCRI is because of the affordability of the education provided. Now, because of these rate hikes, current students and their families, who have already received their financial aid award packets for the year, are forced to come up with even more money to fund their educations. This is especially tough on families on already restrictive budgets who now have to somehow cough up hundreds or thousands of extra dollars to continue their or their loved one’s education. Unfortunately, unlike the executive branch of their state government, when Rhode Island families go over their budgets, they have no one to take funding away from in order to make up for the shortfall.
Following Berard’s reasoning in principle ought to lead one to small-government conclusions. Take his thought another step: When citizens face a shortage of income, because they lack jobs, they can’t just turn to wealthier neighbors and take the money from them. Instead, they tighten their belts and focus on improving their circumstances for the future.
There are two explanations on the table for the current state of our state’s budget. The first, presumably Berard’s, is that Rhode Island has been allowing its wealthier citizens to keep too much of their money. The second, the correct option, is that the government is spending money on things that it oughtn’t be spending money on — from extravagant worker benefits to an imbalanced welfare industry. Reluctance to admit the second conclusion leads Berard to miss his rhetorical mark in two significant ways.
The first relates to his mistaken inference that the governor would intend to make up the full loss of revenue from the eliminated income tax through sales tax, “assuming that taxpayers will just spend their extra money on retail purchases”:
Rhode Island is in a recession, has the highest unemployment rate in the country, and we rank 18th in home foreclosures. Besides that, a great majority of residents’ retirement savings are in question due to the volatility on Wall Street and the instability of financial markets. What makes the Governor think that we’d choose to spend that extra income on a new car, iPod, or plasma TV, rather than paying our mortgages, purchasing groceries for our families, or saving for our retirements? Or paying our tuitions?
Note the implication that Rhode Islanders can’t pay for mortgages, groceries, retirements, or tuitions as things stand. How then is it moral to take money from their paychecks? No, a shift in the state’s method of taxation wouldn’t likely be a wash as a matter of revenue, but more of its citizens would have more money in their pockets in order to support their families, save, and invest, whether by investing we mean purchasing stocks, investing in real estate (i.e., a home), or investing in their own educations. If, financially, they need to avoid taxes, they can do so by eliminating consumption.
The second assumes that the working and middle classes won’t act out of self interest (ironically, because it is clearly in Berard’s self interest to push this line):
What if, instead of gambling that business will take root in Rhode Island by abolishing taxes, Rhode Island instead decides to provide initiatives for and incentives to the students in its higher education system who aspire to help grow the statewide economy? What if, instead of allowing the lower and middle classes to bear a larger percentage of the tax burden, Rhode Island instead provided a way for those same people to increase their level of education, which induces economic growth? Instead of helping to better the lives of Rhode Islanders, though, the actions of the Carcieri administration have simply served as hindrance to our advancement, both financially and educationally.
So, it is a gamble to attract businesses by allowing them (and their employees) to keep more of the money that they make here in Rhode Island, but it is somehow not a gamble to hand cash to students in the hopes that they’ll leap from the graduation stage to slay the state’s economic demons with their diplomas. That’s worse than a gamble; it’s unrealistic. Newly credentialed citizens generally lack the resources, the experience, and the tolerance for risk to build businesses from the ground up. Graduates will go where the jobs are, and the jobs are currently more likely to be found anywhere in the United States other than Rhode Island. Any coins that the government plunks into the educational slots, in other words, just fall out the back of the machines.
The difficult reality that many of those who’ve read Berard’s commentary on RI Future are ideologically disposed to deny is that a state so desperately in need of economic expansion must shave off all expenditures that do not serve that single-minded objective. That means paying less to keep the government operating. That means paying less for the education that its towns provide. That means regretfully admitting that those in need of assistance have to look elsewhere.
Because their constituencies rely on it, those on the left emphasize the health of the politcal entity, of the government. At this moment in history, Rhode Island needs to focus on the well-being of its people.