Legislators Making Up Taxes as They Go

One must laugh out loud, if only to keep from crying. Here go Rhode Island legislators toying with making tax code more complicated and less beneficial to taxpaying corporations, with a tinge of state tinkering with the shape of the economy (i.e., what sorts of businesses it rewards):

Current law generally allows the tax break only if a business creates jobs that pay at least $11 an hour or so (about $22,900 or so a year, based on a 40-hour workweek).
The proposed legislation would allow the break only if a business creates jobs that pay at least $18.50 an hour or so (about $38,500 a year).
State Rep. Steven M. Costantino, D-Providence, chairman of the powerful House Finance Committee, and chief sponsor of the bill (H 6164), said, “I think we all want [more] jobs. But in order to get a credit, I think you have to have a higher threshold.”
Businesses would continue to be free to create jobs at various pay levels, Costantino stressed.
But in order to claim the tax break, they would have to create jobs that pay more money than the law currently requires — and also carry health insurance and retirement benefits, according to the bill.

And yet:

The state thus far has not studied in detail the benefits that the job-creation or other such tax breaks provide to the state, cities and towns, such as tax payments made by the job holders or other economic benefits.

As far as I can tell, there’s not even any sort of governing philosophy behind vague expectations about what the actual results of such legislation will be. That is, legislators don’t even appear to consider whether, in broad terms, more companies will benefit, fewer will benefit, more will create jobs, or fewer will create the jobs that apply to their business models (because they don’t qualify for incentives).
Of course, the whole issue is colored by the fact that this tax break is largely enjoyed by a single company — CVS. That being the case, the General Assembly should just make things simpler and boost business activity period by lowering the taxes and trimming the fees, regulations, and mandates on people and organizations that contribute to Rhode Island’s economy.

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Scott
Scott
12 years ago

I agree. I am sick of hearing about “fairness”. Lower the taxes, INCREASE the tax breaks for employers and, in the name of fairness, ensure EVERYONE has the opportunity to advance their position to a higher paying job through education, training and hard work. If we all have the same OPPORTUNITY to improve then it is FAIR. The individual must want to improve for themselves to get the higher paying job. LOWER ALL TAXES NOW !! CUT DEEPLY THE SOCIAL WELFARE PROGRAMS !!!

Patrick
Patrick
12 years ago

This is going to personally save Tom Ryan a whole bunch of money. He’s going to lose a tax break, so why keep donating to the campaigns up there. Ryan sure as hell ain’t gonna start paying 16 year old candy-stackers $18.50 an hour plus health and retirement.
I’m sure other businesses are just dying to open up shop in Rhode Island now that they only get this tax break for paying someone about $38,000 a year plus benefits.
Remember when Ross Perot referred to the giant sucking sound toward Mexico? In Rhode Island, we have a giant flushing sound as they drive us further downt he toilet.

George
George
12 years ago

Prediction: even lower tax revenues as a result of this scheme if it passes.

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