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Travis Rowley: RI Needs More Rich People

Saturday, November 19, 2011


Sometimes you have to break it down for Democrats, and keep it very simple.

So let’s start with this: If Average Joe was living in a town of only eleven people – himself and ten neighbors – would it be more advantageous for Average Joe if all ten of his neighbors were wealthy? Or would Average Joe be better off if all of his neighbors were poor?

As Democrats attempt to avoid the trap that is clearly being set for them here, normal people have already made up their minds: Clearly, Average Joe would have a better chance at prospering if all ten of his neighbors had the resources to hire him, or even offer him loans. Some might say that this would enable Average Joe to have the wealth – Democrats, cover your ears – “trickle down” to him.

And just to clarify for all the Marxist Occupiers, we’re talking about these things called “jobs” here.

Wait. Hold on. Council 94’s Michael Downey is grunting something: “Yea, but don’t forget that Average Joe’s new CEO is probably going to be mean and greedy, and is just going to end up exploiting him. He’ll give him low wages and no benefits. Solidarity forever!”

Ugh. Unions.

Actually, with nine other job creators in town, Average Joe would enjoy the economic advantage of having ten people bidding on his labor, thereby driving his wage upward and ensuring good working conditions. Not too many Democrats understand this concept, but the best way to combat “evil corporations” is to bring in more “evil corporations.” About 93 percent of the private American workforce operates in this non-unionized, competitive, free-market fashion. It’s what many people often refer to as “the real world.”

Wait. Hold on. Senator John Tassoni (D), from all the way in the back of the classroom, is chiming in: “Uhhhh, the best thing would be for the town government to take money from the ten rich people and just give it to Average Mike.”

Okay, moving on.

Once one accepts the premise that it helps the ordinary man if he is surrounded by wealthy individuals, then one must conclude that it would be harmful to Average Joe whenever wealthy people move out of his town.

So, besides having Senator Tassoni move right next door, what are the most prolific methods of driving the rich out of Average Joe’s neighborhood?

- Tax the Rich: It is well-known that if you desire less of something, then it helps to have the government tax it. Unions, Democrats, and Marxist activists consistently clamor for tax assaults on, not just the wealthiest among us, but even those who are just starting to gain momentum toward millionaire-status – say, people who earn over $200,000 a year.

- Seize Their Property When They Die: The wealthy aren’t stupid. And even if they were, their tax attorneys certainly aren’t. Local businessman Alan Hassenfeld said last year, “Virtually all of my wealthy friends and fellow philanthropists have moved their residencies out of Rhode Island…This loss of income to our state’s economy, to our tax revenue base, and for local charitable-giving is a lose-lose situation for everyone involved. Unless there is a drastic change in the punitive estate tax here in Rhode Island, anyone in my position would be a fool not to leave.”

- Regulate Their Companies: Bryant University’s Raymond Fogarty once said about Rhode Island, “The regulatory system is out of control.” And, regarding several recent studies aimed at ranking the fifty states in terms of how “business friendly” they are, the RI Public Expenditure Council recently reported, “In every survey that included regulatory environment as a variable, the Ocean State performed at or near the bottom of the country.” The “Regulatory costs – ‘hidden taxes’ – including the costs of complying with environmental, labor and reporting requirements,” have clearly contributed to Rhode Island consistently being considered the “worst state to do business.”

- Cater to Private Unions: Rhode Island Democrats pass laws all the time that favor labor over job creators, making it even more expensive and bothersome to do business in the Ocean State. For instance, Rhode Island is not a Right to Work state, meaning that thousands of private employees are forced to join unions against their will. Unions love it. Wealthy job creators hate it. The same CNBC study that ranked Rhode Island 50th in its “Top States for Business” study revealed that 8 out of the 11 most business-friendly states are Right to Work states. Becoming the only Right to Work state in New England would almost certainly spawn the migration of wealthy people back to Rhode Island.

- Cater to Public Unions: The stronger the public unions, the more tax dollars are siphoned from the private sector. Political power should be restored to the taxpayers, and budget flexibility should be given to local governments, by rescinding the Democrats’ 1966 policy change that bestowed collective bargaining privileges to public unions. Public employment needs to be made less expensive. The unsustainable contracts, along with the statewide pension debt, should be dealt with immediately. Then, Rhode Island can begin to abolish its corporate tax and income tax. This will recruit more rich people to the state.

- Spread Disdain For The Wealthy: Democrats’ contempt for rich people is not reserved for a few corrupt Wall Street executives. The Occupy movement is a sham – a cover for the Left’s collectivist intentions. Democrats need to stop spreading sentiments of class envy and principles of class warfare. If they truly want to help Average Joe, they can start by dropping the attitude.

Free the Rich. It helps the Poor.

While rich people are a primary ingredient for the average man’s prosperity, it seems Rhode Island has been following the perfect recipe for their statewide extinction. No matter what the Occupiers say, it’s not the fault of the wealthy that Rhode Island is watching the suffering and eradication of its middle class. It’s the fault of Democratic principles and policies.

No, Senator Tassoni. Put your hand down. You’re not allowed to speak anymore.

Travis Rowley (TravisRowley.com) is chairman of the RI Young Republicans, and a consultant for the Barry Hinckley Campaign for US Senate.

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LOL - great article.Mr. Rowley - Way to give John Tassoni what he deserves.

Comment #1 by Sierra Lee on 2011 11 19

More piss on economics

Comment #2 by Real Clear on 2011 11 19

Another failure to present an actual argument. Thanks, Real Clear.

Comment #3 by Drew M on 2011 11 19

Nothing is ever really clear in the comments made by "Real Clear"... it confuses the crap out of me!

Comment #4 by Seldom Righthouse on 2011 11 19

No poor person has ever hired me at a good "living wage" complete with health benefits, taxes paid, and equipment to perform the job. This is the case with the rich people whom I have worked for. Eating the rich may make for a tasty meal or two, but if I want to live well year-in and year-out I need to let the rich live and go to work for them. That is until I become rich, then I can hire others to do what I need to have done-thereby enriching them
Jim D

Comment #5 by James Dunn on 2011 11 19

Clinton successfully blinded so many Americans to the 'free enterprise' system by instead robotically clanging the slogan, "Jobs! Jobs! Jobs!" over and over and over again, the way leninists generally do - until their victims are either dead of starvation or well on their way in the gulags.

Just a few years previously, President Reagan had given us an eight year Golden Age by cutting taxes, trying to get BigGov out of the way of opportunity, and kicking the soviet thugs back to their squalid, rusty, blood-soaked cage.

The Reagan Era saw many Americans start their own businesses, mostly small ones, the backbone of any healthy economy.

We started on advice of a good friend, by cleaning homes of 'rich people' too busy to do it themselves. We used the proceeds from cleaning to buy out a wholesaler of military surplus electronics.

We're still at it.

Jobs? Why not just, as another friend wise in the ways of prosperity said, 'find a need and fill it'?

Of course, the statists, socialists, and other communist rats hate that approach, desiring as it were that every man be yoked to their old euro-thug way of death.

Paul Vincent Zecchino
Manasoviet Key, Florida
19 November, 2011

Comment #6 by paul zecchino on 2011 11 20

good article

Comment #7 by Kevin O'Connor on 2011 11 21

Hey Travis:

RI now has a flat-tax option for rich people - just like Rick Perry's plan.

RI has the lowest capital gains rate of any state with an income tax.

We don't even tax yachts.

But we tax $500 cars, both as sales and as property. We take pensions away. We cut bus routes. We broaden sales tax and increase property tax for the little guy who can't figure out how to get a NYC LLC to own his Block-Island home and get through loopholes.

What more do we have to do to get the rich people here? Bend over and buy KY jelly? I'm serious. What more can be done? Fire all public workers?

Comment #8 by Eazy Now on 2011 11 21

Eazy Muthfine,

What more can be done?? Didn't you read the 2nd half of the article??? We didn't earn "worst place for business" for nothing. And catering to unions is half the problem.

Also, to argue that RI bows down before rich people is to live in a fantasy land. A flat income tax that has been implemented for only several years, along with the fact that RI doesn't tax yachts, does not make a rich person's dream world.

And taxing yachts would be the stupidest thing you could do for the poor. Research THE LUXURY TAX!! All that does is put working class people out of work.

Your 2nd point says it all. RI has an Income Tax AND a Capital Gains Tax. Great idea, Democrats. Soak the rich a little more, why don't ya? Pick one or the other. Or get rid of both.

And, according to this report, I'm not even sure what you said was true. You sure RI has the lowest rate? - http://www.thereibrain.com/realestate-blog/2007/10/capital-gains-tax-rates-state-by-state/

Comment #9 by Drew M on 2011 11 21

Drew M

Comment #10 by Eazy Now on 2011 11 22

I'm open to honest discussion/debate here.Here's the skinny on the capital gains tax


Comment #11 by Eazy Now on 2011 11 22

Actually, it has been a moving target in RI. I'd think that the business climate would be better served by stability than by constantly changing rates. 41 states have a capital gains tax. The same number that have an income tax. RI is one of only 20 states with an estate tax - but I don't think that's the worst one (millionaire retirees seem to inevitably move to FL - even if they're in low-tax states).

I'd actually not object to the NH model of higher corporate taxes and socialized liquor sales and (some) public utilities in exchange for no sales tax and no income tax. It lets you work a comparative advantage that RI could exploit with CT and MA.

But what we have now is the worst of both worlds for the middle class:
1) Very expensive social services, and 2) Very favorable tax breaks for the wealthy
It shifts all of the burden to the middle.

The unions have gotten a consistent shellacking now for 5-10 years. The Dems even take their benefits away. How much more do you want from them? It's a serious question. Our public employee per capita ratio is one of the lowest in the country now.

They don't tax yachts. But they tax cars once when you buy them then once every year forever. Wouldn't car dealerships do better without the car tax? Why are yachts special?

Comment #12 by Eazy Now on 2011 11 22

Some quick thoughts:

It's not about choosing to tax the middle class over taxing the rich. Neither should be heavily taxed. No car tax. No yacht tax.

Also, I think you're forgetting that RI has a 9% corporate tax (i think). And I believe it's the highest in the region, and one of the highest in the country. RI is forced to give special deals to big corporations to entice them to move here.

Income Tax. Corp Tax. Cap Gains Tax. Estate Tax. Strong public unions that pull money out of the private sector. Not a right to work state.....These are the conditions that repel wealthy people and job creators. The result is a higher cost of living and a growing tax burden on the middle class.

Comment #13 by Drew M on 2011 11 22

Yeah, the corporate tax rate is somewhat high - but not for New England. CT is the only one within driving distance that's substantially lower at 7.5%.

But I think it is about choosing to tax the middle class rather than the rich. See, they DO give tax breaks for yachts. They DO NOT give tax breaks for cars. They DO hit the middle class with regressive sales, use, property and excise taxes. They DO give a flat income tax break at the top bracket for rich people.

The poor don't pay taxes anyways. So when the state government gives tax breaks to the rich, they hit the middle class harder. It has been happening for 10 years now in Little Rhody.

The public unions are not strong. They couldn't even muster a dozen votes to keep their pensions. They got muscled out easily by business with Gina and Engage RI. They used to be strong. Now they're a joke.

We have the sixth-least public sector workers in the country: http://www.pbn.com/RI-has-6th-least-government-employees,50304

There are only 2 billionaires in RI, in case you didn't know. They're the heiress to the Campbell's Soup fortune, who never worked in her life, and the head of Providence Equity Partners (more finance). They are doing quite well now. Combined, they employ maybe 12 people.

The middle class has not been doing so well.

If you want to get rid of taxes, that's fine. Start with ones I can get behind as a middle class citizen. Don't start with special deals for yacht owners and top income earners.

Because despite all of the deals they have gotten, my taxes have gone up, and the employment picture in RI has only gotten worse.

Comment #14 by Eazy Now on 2011 11 22

Well, you seem to be denying the very premise of rowley's article. But it seems to me that he proved the case that having more rich people around is better for the average poor/middle class person. If you want to deny the logic, go ahead. But I'm not sure how you can argue against the article. RI is economically hostile to the wealthy and entrepreneurs (the regulations!), and as a result we have a poor economy that the average person cannot benefit from.

Also, there's a few things wrong with your analysis that leads you to think that the "rich" have gotten away with murder in this state. That is simply not true. In fact, it's the opposite. A few notable "special deals" is not evidence that the rich are catered to here in RI.

You can't replace the car tax revenue with a yacht revenue. There just aren't that many yachts. And if you try to make the yacht tax too high in order to equalize the revenue, you will end up enacting a severe luxury tax that only ends up hurting the middle class anyway (loss of jobs). Democrats know better than anyone that the REAL revenue is generated from the middle class - picking the pockets little by little.

So there is no choice. Both choices hurt the poor and middle class. You can't hurt the rich. They'll just stop buying yachts. Research the 1990s luxury tax for proof of this.

The solution, then, is to create the friendliest environment possible toward the wealthy and business entrepreneurs.

Further, your language is misleading. You don't get a "tax break" for buying a yacht. You're just not taxed on the ownership of a yacht. But the rich pay car taxes, too.

Also, the rich don't get "tax breaks" by the flat tax option. We have a progressive income tax in RI. The state has offered a flat-tax OPTION to the highest tax payers - 5% flat or circa 10% (i think) with deductions. They are still paying much more than anyone else in RI. This is not a tax break. It's still a policy that is driven by a "tax the rich" philosophy. Let's at least acknowledge that.

Let's be clear: RI doesn't have a flat-tax. There's a flat-tax OPTION for those in the highest bracket...And I believe the threshold is 200k or above.

Lastly, the public unions aren't strong? Name a stronger interest group in RI. Name another entity that spends MILLIONS on local elections. Let's not fool ourselves here. They are now losing influence on their extreme positions because RI is in such a desperate position. There is nothing else left to do but give the public unions the stiff arm. That's how much damage they've done.

The NUMBER of public employees is not the issue, it's the percentage of public employees that are unionized - 62% vs national average of 37%. And the COST of our public employees reflects this rate of unionization. Our public employees, on average, make much more than the average private worker. That's wrong.

It's the unfunded mandates that the unions force upon the cities and towns that push the local car and property taxes sky-high!! It's the public unions, man.

Comment #15 by Drew M on 2011 11 22

Hi Drew,

We can agree to disagree with the premise of the article.

So far as unions go, they were strong, but they're not now. The number of public employees illustrates that, I think. They're a dying breed. Now some overhead costs are associated with that, for sure.

But if you really look at the state's budget, it's Medicaid that's the primary cost and primary cost driver, not public sector workers anymore.

I just want to be realistic with it.

The car tax used to give a $6,000 exemption on the excise portion. They do not now. Now Advil is hit with 7% sales. It was not before. John Kerry would not be mooring his boat here to tax dodge. To me, it's unpatriotic to be a tax dodger - no matter what political party you're affiliated with.

He would have paid hundreds of thousands of dollars for initial sales tax and annual excise tax - the equivalent of 100 $10,000 cars for his yacht alone.

You are correct that it is a flat tax option. But the option isn't there to help the middle class. Only the top bracket. They lowered the top bracket, but not the one right underneath it. Why just that one?

See, to me, the best argument for tax reduction is in the middle. It creates a strong middle class.

But there is no political party arguing for cuts to Medicaid/welfare AND eliminating special deals and tax loopholes for the rich.

Both Democrats and Republicans expand welfare for the poor AND give tax breaks to the rich.

What RI needs are a lot more customers who spend money at MY BUSINESS because they have disposable income. Billionaires will not deign to spend $20 a plate at my restaurant. A few more people making $50k/year will. The more you tax the middle class and give them outrageous parking tickets etc. like in Providence, the more business we loose.

Comment #16 by Eazy Now on 2011 11 22

One more thing: Which regulations do you have a problem with? The DOH regulations around restaurants are easy enough to navigate.

I always here this regulation thing. Can you point to one that's a problem.

Now Providence City Ordinances, they're a nightmare. State regulation's not so bad imo.

Comment #17 by Eazy Now on 2011 11 22

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