Any Way to Tax the Productive
A letter by Middletown Republican Town Committee Chairman Antone Viveiros in the Newport Daily News directs attention to H7563, submitted by Rep. Amy Rice (D., Portsmouth). The legislation would add the following language to Rhode Island tax law:
Opting out of the domestic production deduction. — All corporations doing business in the State of Rhode Island shall add back into their taxable income any amount deducted under the federal “domestic production deduction” also known as section 199 of the federal Internal Revenue Code. State tax forms shall be changed if needed in order to comply with this statute.
For the likes of Rice, it appears, ideology trumps economic wisdom. Even were it a principled correction to remove national tax reductions from the Rhode Island calculation, sucking money out of the productive segment of the state is plain lunacy in the current economy and in our current condition of civic deterioration. As Viveiros asks in closing:
Is this the way to create jobs?
Why won’t the General Assembly majority cut spending, as we have? Do they have to, to get reelected? I’ll leave those answers to you.
I think Amy Rice’s bill makes a lot of sense for several reasons. It’s merely de-coupling from a corporate tax break at the national level that the RI Assembly never voted on.
1) It’s not about ideology as you say, seeing as conservative states like Texas, Georgia, Tennessee and others have already passed this legislation.
2) In fact, every state in New England has already passed this legislation except RI and Vermont.
3) This legislation would eliminate a tax break that only goes to corporations, most of them large multi-state and/or international corporations that are unlikely to spend or invest the tax break in RI, much less use it to create jobs.
4) There’s no proof it creates or sustains jobs, and likely doesn’t
5) The way the tax break is written, we are likely subsidizing production not even occurring in Rhode Island but in other states