What’s Tom Talking About?
Once you get over the fact that they make a living doing for the left what we on the right must do as a hobby, a messaging guy like me really has to sympathize with the plight of those charged with maintaining the components of the status quo that have done so poorly for Rhode Island. How to present Rhode Island’s predicament as such that it needs more poison? Well, here’s one tack (emphasis in original):
The highest taxes? Please. New Hampshire is a tax haven, right? Some of it is, but if I were to move from my home here to a comparable house in Jaffrey, Keene, Peterborough, or any equally unfashionable town, my total taxes would increase even without a sales or income tax. Our state and local taxes are lower than the national average, according to the Tax Foundation rankings whose poor methodology actually exaggerates the impact of our income tax. (We rise to 10th in their rankings only when they add the taxes you and I pay to other states, I kid you not.) There are at least 27 other states with higher sales taxes for at least some of their counties than we have. We have high property taxes, yes, but can you fix that by level funding the cities and towns while piling on new mandates?
Because Tom Sgouros provides no sources for his New Hampshire assertions, I’ll leave them alone, except to note the excess of wiggle room when comparing specific towns across state lines, as well as defining “comparable.” The Tax Foundation argument, however, is worth a closer look.
The inclusion of out-of-state taxes isn’t the only reason that “we rises to 10th” in the Tax Foundation rankings. Our relatively low average income is another. The Tax Foundation table shows that Rhode Island ranks 17th for absolute per capita taxes paid in state, but because we’re #8 for taxes paid out of state, we come in at #12 overall.
We rise the extra two ranks when that dollar amount is expressed as a percentage of average household income. Granted, we’re a small state, so a larger percentage of our population is likely to work and shop beyond our borders, but if one is looking at the state as a potential place of residence and business, taxes paid are taxes paid. Even this argument, however, allows too much, because the in-state-only ranking is a bit misleading, as is Sgouros’s astonished declaration that our taxes are “lower than the national average”; that’s the case only because the range of state taxes goes out more dramatically on the high end.
Changing measurements to deal with this imbalance, it proves true that Rhode Island’s in-state tax burden is 21% higher than the national median. For perspective about why that matters, consider that Rhode Island’s in-state taxes are farther above the median than the lowest-taxed state is below it. It’s worth noting, too, that our progressive income tax would translate into a worse ranking as we succeed in attracting those coveted high-paying jobs.
Which brings us to the aspect of Sgouros’s essay that really reads as spin:
This shortsighted perspective [of lowering taxes], and the determination to pursue it at all costs, has thoroughly ruined the service side of the equation, and given us the worst of both worlds: devastated services and higher state and local taxes. Bankrupting the state is not a route to prosperity.
We are a relatively poor state and proportionately very urban. We may not ever be able to be a low-cost state, but that doesn’t mean we can’t compete, as DandyID shows. We have other high cards: a beautiful state, a hip capital city, a fabulous art scene and more. What we don’t have is policy makers willing to play them.
One might understand Tom to be arguing that DandyID, which he briefly profiles, points the way to the services that Rhode Island provides. In the preceding text, however, he lists “affordable office space,” which is an indication of broad vacancy, Geek Dinners, which are a private initiative, and RI Nexus, which is a corporate database maintained by a quasi public organization. That’s hardly a collection of assets threatened by deep cuts to state government spending (with the possible exception of the office space, which will go up in price if the state gets out of the private sector’s way). On the other hand, it may be telling that DandyID, despite its office in Pawtucket, is not registered as a corporation in Rhode Island and still has its Internet domain registered in Colorado.
Be that as it may, if Tom wants to include government services that will help make Providence even hipper and the state art scene even more fabulous, he ought to argue for redirecting the revenue from his union clients and social service allies. Otherwise, we citizens who pay so much in out-of-state taxes will continue to conclude that we might as well pay them all elsewhere.