Telling Reasons to Object to Tax Cuts
I’ve got my reservations about Governor Carcieri’s tax proposals on the grounds that they don’t go far enough, especially in extending their effects to middle and working class residents. But some of the objections from the other side should inadvertently direct Rhode Islanders’ attention to the underlying problems of the state:
Karen Malcolm, executive director of Ocean State Action, a coalition of labor unions and advocacy groups, said previous state tax cuts have not worked. “The policies we’ve been following have not brought the promised jobs,” she said.
Instead of phasing out the corporate income tax, for example, Rhode Island should instead seek changes to local property taxes, which represent the single greatest tax burden for business, she said.
Of course, local property taxes are so high in part because the unions — especially the teachers’ unions — have been more successful at pumping up their members’ remuneration packages from that stream. Witness:
Malcolm goes on:
And to improve Rhode Island’s overall business climate, the state should focus on other areas, such as fixing crumbling roads and bridges, she said.
Of course, infrastructure repairs are more expensive than they would be absent union rule and the related regulations. (It’s quite a thing to drive by a roadwork site and witness the two flag-bearing women standing next to each other, flags down, chatting while the mandatory police officer chats on his cell phone, back to the scene.) Moreover, the fact that the state typically allocates 0.0% of its General Revenue to transportation suggests that Malcolm is seeking to raise additional taxes to direct toward labor.
Then there’s the other side of the problem:
Rick Harris, executive director of the Rhode Island chapter of the National Association of Social Workers, said Carcieri’s proposals would drain away tax revenue at a time when it is most needed for education, health care and other programs. “If you’re taking more money out of the system, how are we going to meet this need?” he said.
Directing the wealth of productive, working Rhode Islanders to those who are otherwise — even if the intention is to make them more productive — is part of what created our current hole. If we’re to have any hope of turning things around, we must reverse our focus and increase activities that create revenue, rather than expend it.