Flat Tax Good, but Not Enough

As you may have heard, the gradually decreasing flat tax in Rhode Island has survived attempts to freeze or repeal it (so far). I’d note, though, an excellent point that Matt Allen made during the six o’clock hour: It’s foolish to think that the flat tax decrease is sufficient. For two things: Rhode Island’s tax advantage for capital gains is evaporating with this budget, and new savings for businesses have been left on the cutting room floor.
The tendency of disputants to break the big questions into their constituent parts goes a long way toward explaining the condition of our state. It’s all patchwork policy, with no overarching principle. We trade this tax break for that union concession and that welfare adjustment, with the result being incoherence and inadequate counterbalance to the special interests that have infested the State House and town halls. Any potential reform candidates loitering about the edges of public consciousness should come up with a holistic plan and insist that it only works as an irreducible machine — as I’ve been suggesting that the governor do by disowning the budget if the General Assembly made any substantial changes.
We need responses to such statements as the following example, from Matt Jerzyk, of why I’m nostalgic for the previous iteration of RI Future:

What should be more important in a recession in Rhode Island? Just think about it.
If you are recently unemployed in Rhode Island or facing tough times at work, can you afford a jump in your property tax bills?
Alternatively, would a Rhode Island millionaire even know if their accountant paid a little more on their tax returns.

Even a few hundred dollars of increase or decrease in a given tax bill is not what unemployed Rhode Islanders need. They need jobs. They need businesses that find their state to be an attractive place to open up shop and expand — without special deals or credits, merely because that’s the way the state is structured. They need the sorts of people who have money to burn no matter the overall economy renovating homes, buying goods, dining out… being present and living their lives among us.
As for the millionaires and their accountants, the premise that we can slip tax increases by them is (I’ll euphemize) poorly considered. Even so, an accountant will inform his clients if a move — often an on-paper affair, when it comes down to it — to Rhode Island would cost them thousands or millions over a certain period of time or from Rhode Island would save them the same.

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