Don’t Scheme on Taxes, Simplify
URI Economic Professor Edward Mazze’s tax-cutting suggestions sound reasonable enough, but one can’t help but be suspicious of the urge to control:
Murphy said of Mazze’s plan, “I want to be open to it.” Murphy said he was particularly interested in Mazze’s proposal geared toward revitalizing local downtown business districts.
Murphy said he remembers a vibrant Main Street in West Warwick when he was a boy. “I know in the last 40 years, our Main Street in West Warwick has not come back to where it was,” he said.
An article in the latest Sakonnet Times (not online) describes the Tiverton Town Council’s approval of a suite of zoning changes for commercial districts, and the accompanying pictures present a similar longing for the downtown-style main street. But there are reasons other than zoning and the lack of targeted tax breaks that Main Streets have been disappearing. Some of them are cultural; some of them are economic; the point is that attempting to counteract these forces will come at an economic cost and may fail to produce viable businesses, anyway.
In other words, if pulling the Rhode Island economy back up the cliff is the objective, we shouldn’t be layering all sorts of aesthetic preferences on pro-growth policies. We also should focus on simplicity. All of Mazze’s proposals will benefit people savvy enough to know about the breaks, to take the proper steps, and fill out the proper forms, but big-government corruption and waste illustrate very well that the skill set for jumping through hoops is not necessarily an indicator of a successful business. “Targeted” tax cuts, in that sense, become targets for which people looking for breaks will shoot. We need to encourage people who are interested in running businesses.
As Roland Benjamin says:
“If [Rhode Island’s] tax structure was reasonable in the first place, you wouldn’t need [targeted tax breaks].”
And if Rhode Island’s political and academic leaders were competent to manipulate an economic recovery, we wouldn’t be in the mess that we’re in.