‘Tax the Rich’ Campaign Kicks Off at State House
Wednesday, March 07, 2012
A new group that wants to raise taxes on the wealthiest Rhode Islanders kicked off a campaign Tuesday in support of legislation that will increase the income tax rate from 5.99% to 9.99% on individuals making over $250,000 per year. The tax rate would go down one percent for each one percent reduction in the state's unemployment rate, until the rate returns to 5.99 percent.
The group, known as Rhode Islanders for Tax Equity (RITE), is supporting legislation sponsored by Representative Maria Cimini in the House (H-7729) and Senator Joshua Miller in the Senate (S-2622). House Speaker Gordon Fox and Senate President M. Teresa Paiva Weed do not support the bill.
“When the General Assembly enacted the alternative flat tax option in 2006, they said it was going to help create jobs and stimulate our economy," United Food and Commercial Workers Secretary/Treasurer Jim Riley said. "But where are the jobs? Six years later, unemployment is still high, important services have been slashed and property taxes are disproportionately hurting lower and middle class Rhode Islanders. And the wealthy got wealthier. This tax policy has been a miserable failure for the vast majority of hard-working Rhode Islanders. It’s time to try a new direction.”
RI Could Gain $118 Million in Revenue
According to the Institute on Taxation and Economic Policy, Rhode Island stands to recover $118 million in revenue by implementing this measure, which supporters say would effectively close to projected deficit for 2013. RITE is advocating for this recovered revenue to be used to help lower and middle-income Rhode Islanders.
In 2006, the state implemented the alternative flat tax, which benefited mostly high-income Rhode Islanders. Although supporters of the tax breaks claimed they would create jobs and spur economic development, critics say that six years later, the state’s unemployment rate stands at 10.9%. RITE said the additional revenue could be used to increase funding to struggling cities and towns, lower property taxes on hard-working, less-fortunate Rhode Islanders and small businesses, restore cuts to critical programs that help our most vulnerable citizens, stop increases in tuitions at our state colleges and universities, and repair our roads and bridges.
Pawtucket Mayor Donald Grebien, the only Mayor that has signed on in support of the legislation so far, pointed to Central Falls and other struggling cities and towns and said the bill could be beneficial to municipalities
“Cities and towns across Rhode Island are struggling, and one major reason for this is the years of ongoing funding cuts by the state," Grebien said. "With this legislation, enough money would be raised to restore some state funding to cities and towns and allow mayors and other municipal leaders to ease the property tax burden on our constituents. Rhode Island’s regressive property taxes are some of the highest in the country. We can’t keep strangling lower and middle-income Rhode Islanders with more and more property taxes while we continue to give tax breaks to those who need them the least.”
New Study: Moderate Tax Increase Will Not Hurt State
In conjunction with the campaign kickoff, a new study citing the benefits of increasing taxes on the wealthy was released by The Economic Progress Institute and economist Jeffrey Thompson of the Political Economy Research Institute,
The paper, titled, Raising Revenue from High-Income Households in Rhode Island, looks at decades of evidence and clearly finds that such income taxes effectively raise substantial revenue, without risk of harm to a state’s economy.
“There’s a lot of politicized rhetoric about what could happen if states moderately raise their tax rates for their wealthiest citizens," Thompson said. "But the reality, based on very clear data, is that the end result will be more revenue in the state coffers to pay for public services. None of the scare stories—people fleeing the state, people stopping work, or not starting new businesses—have been shown to happen in the past, or are likely to happen now. Wealthy households have reaped vast benefits from state and federal tax codes for decades now, and to look to them now for much-needed revenue is sound policy.”
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