Stimulating Everybody in Rhode Island
Rep. Stephen Ucci (D., Cranston, Johnston) has proposed legislation with a targeted “stimulus” intention:
The bill (2010-H7905) would implement a three-year freeze on the sales tax of all building materials used in the construction of new or improvements to existing residential and commercial buildings.
“The retail sales tax incentive program would essentially amount to a seven-percent discount on raw materials used to construct or make improvements to any building, including wiring and plumbing supplies,” said Representative Ucci.
In addition, Ucci’s construction stimulus package would implement a three-year property tax moratorium on all new construction and improvements to existing buildings completed in 2011, 2012 and 2013.
I suppose, since it’s my industry, I shouldn’t be inclined to criticize the intention, and I suspect the legislation’s chances of making it into law are just about nil. But I do wonder why the move should be so limited. If it would be a good thing, by decreasing sales tax and holding back property taxes, to stimulate the economy, why not stimulate it all around? Construction’s an integral field for economic development, but it doesn’t really open up new routes for economic growth.
Once the houses and office buildings are erected, people have to live and do productive things in them. That’s what the state ultimately has to begin encouraging, rather than discouraging.