In response to the protest rally held by the business community yesterday at the State House, the governor asked for proof that his proposed massive broadening of the sales tax will damage Rhode Island businesses.
Rhode Island currently has the fifth highest state and local tax burden. It also has one of the worst business climates in the country – the latter due in part to the high cost of doing business here in which a myriad of government regulations, taxes and fees features prominently. (Boiler fee, anyone?)
However, these conditions did not evolve overnight. One by one, such regulations, taxes and fees were added. And then, one by one, many of them were expanded or increased, sometimes repeatedly; in the case of the fire code, to a ridiculous degree. As this happened, Rhode Island slowly evolved into its current status of business and property-owner unfriendliness. In response, one by one, businesses moved out of the state; naturally, taking jobs with them in the process.
This, then, is the fulfillment of the governor’s assignment: the proposed massive broadening of the sales tax is a continuation of a decades-long practice that has slowly but inexorably driven business out of the state.
If we’re ever going to pull out of this downward spiral, we need to head in the opposite direction. Regulations need to be addressed. And let’s come to grips with the budget’s structural problems so that we can begin decreasing taxes and fees rather than once again doubling down on failure and increasing them.