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Are you angry yet? Tax silly season at the State House

Thursday, June 03, 2010

 

Rhode Island’s taxes are too high for many Rhode Islanders. I think most of us would agree with that statement. But unfortunately, many of our legislators on Smith Hill – Republicans and Democrats alike – believe that taxes are too high on the top one to two percent of Rhode Islanders, and not the rest of us. And if they have to cut taxes for the wealthiest and big business, and small business and middle class families get the shaft, while schools and hospitals face another year of devastating cuts? So be it, apparently.

But don’t take it from me. Go to www.rilin.state.ri.us and read House Bill 8196, introduced by Rep. Helio Melo, Democrat of East Providence, along with Chairman Steven Costantino (D-Providence) and three other legislators. And if you have time, read the Poverty Institute’s analysis of this very troubling bill (www.povertyinstitute.org).

House Bill 8196, which appears headed for the smoke-filled-room sure passage by the end of next week, drastically changes the Rhode Island income tax, impacting each and every person and business who pay taxes in the state. The bill will cost an estimated $23 million – far less than the $60 million-plus car tax increase that the Assembly is poised to approve in the Fiscal Year 2010 and 2011 budgets.

Wait a second – what’s that? Raising the car tax? Weren’t we supposed to be phasing that tax out? Do these legislators remember their old colleague Tony Pires, who got more than 20 percent of the Democratic vote for Governor in 2002 by running on this issue alone?

Alas, the budget, which is scheduled for a House vote on Thursday and likely a Senate vote within days after, reduces the exemption that cities and towns must provide on the car tax to the first $3,000 on the value of your car, rather than the first $6,000. In other words, if you live in Providence, for example, and you have a car worth $6,000, your tax this year on it is $0 – but your tax next year could be over $225.

Are you angry yet? If not, consider that House Bill 8196 would reduce the overall income tax but increase taxes to more than 90,000 Rhode Island families, individuals and businesses – and this isn’t even counting the car tax hike. Among the worst provisions is maintaining the marriage penalty that people pay on their federal taxes, which is particularly worrisome to me as someone who will file taxes as a married man for the first time next year.

Of course, we need taxes in Rhode Island to do all the things that make this a great place to live – from educating our kids to protecting our coastline to supporting a top-quality health care system. But we also need to keep middle-income and working-class people with critical job skills in the state of Rhode Island – rather than stressing them so much that they move elsewhere. The recession has pounded Rhode Island’s middle class enough already – call your legislator and ask the Assembly not to pile on with H8196 and the budget’s car tax increase.

Peter Asen is director of Ocean State Action and organizer of the Campaign for Rhode Island’s Priorities

 

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