Valencia: tax justice = jobs

Valencia promotes tax equity bill as pro-workforce

Larry, with bill co-sponsor Donna Walsh

STATE HOUSE – Rep. Larry Valencia says his legislation (2014-H 7552) reversing Bush-era tax cuts at the state level for Rhode Island’s highest earners is not only a matter of equity, but also an idea that would potentially boost the quality of the state’s workforce and the success of its businesses.

“The notion that prosperity trickles down has not been effective in improving Rhode Island’s economy. Instead of expecting prosperity to fall through the cracks toward the middle class and lower-earners, we should make the burden more equitable so those who most need to invest their limited resources on the things that enable them to get a good job, like higher education, child care and transportation, will be able to do so. More money in the pockets of middle and lower income Rhode Islanders means more money being spent at our local businesses. This legislation would be a very positive development for business,” said Representative Valencia (D-Dist. 39, Richmond, Hopkinton, Exeter).

This is the fourth year Representative Valencia has introduced the tax equity bill, which he calls his “civic responsibility plan.” 

The legislation directly reverses one of President George W. Bush’s 2003 tax cuts for affluent Americans: a 4.1-percent tax cut for married couples on income over $250,000 and for individuals whose incomes are $200,000 or more. His legislation would restore the former rate of 10 percent on income over those levels, requiring individuals to pay an additional 4 cents on every dollar of income above $200,000 and married couples to pay the same on income greater than $250,000.

Representative Valencia noted his proposal is relatively conservative and would affect only 5 percent of Rhode Island taxpayers, but it would raise an estimated $170 million for the state in Fiscal Year 2015 if such a rate were in place this year.

With the additional revenue, the state could reduce the sales tax or other taxes and fees onerous to small businesses, or make investments in infrastructure or programs that would improve Rhode Island’s climate for families and businesses.

“The new House leadership team has emphasized that it will focus on a pro-jobs agenda. I contend that raising more revenue can generate jobs if we focus on paying for infrastructure, developing our workforce and providing more money for higher education. We all agree that closing the skills gap will make our workforce more attractive to employers, and this revenue is our chance to do exactly that,” said Representative Valencia. 

Cosponsors include Representatives Maria E. Cimini (D-Dist. 7, Providence), Edith H. Ajello (D-Dist. 1, Providence), Donna M. Walsh (D-Dist. 36 Charlestown, New Shoreham, South Kingstown, Westerly) and Teresa A. Tanzi (D-Dist. 34, South Kingstown, Narragansett). The bill is currently before the House Finance Committee, which held a hearing on it yesterday and held it for further study.