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| Budget reflects the policies of new right-wing Speaker |
5. Slashing the corporate income
tax from 9% to 7%.
New House Speaker Mattiello, a very conservative Democrat from
Cranston, has been championing this idea ever since he rose to power.
Naturally, progressives would prefer to see these funds spent on jobs
programs like infrastructure spending. But what is perhaps most
disappointing about this cut is how it hands a big break to the businesses that
least need the help, not the ones that need it most.
At the federal level, we have a progressive corporate income tax, so businesses with smaller profits pay a lower rate, which helps increase competition. But in Rhode Island, every business pays the same rate, regardless of the size of the profits.
We could change that. We could also eliminate the $500 minimum tax, which unfairly discriminates against small, struggling businesses. If we are going to go down the unwise road of cutting corporate income taxes, instead of spending that money on jobs, helping out small businesses would be a better way to go.
At the federal level, we have a progressive corporate income tax, so businesses with smaller profits pay a lower rate, which helps increase competition. But in Rhode Island, every business pays the same rate, regardless of the size of the profits.
We could change that. We could also eliminate the $500 minimum tax, which unfairly discriminates against small, struggling businesses. If we are going to go down the unwise road of cutting corporate income taxes, instead of spending that money on jobs, helping out small businesses would be a better way to go.
4. Slashing the estate tax.
In Capital and the
Twenty-First Century, one of the most exciting works of economic
research in recent years, Thomas Piketty lays out a bleak picture of
accelerating wealth inequality increasingly dominated, not by earned wealth,
but by inherited wealth–a threat that strikes at the core of the American
Dream.
It is not an understatement to say that this thesis has revolutionized the way the national Democratic Party looks at inequality. Now, more than ever, the party is committed to addressing wealth inequality. Yet in Rhode Island, where the Democratic leadership of the General Assembly tends to side with the national Republican Party on issues, we are moving in the other direction and slashing our state’s estate tax, which disproportionately affects the wealthy.
It is not an understatement to say that this thesis has revolutionized the way the national Democratic Party looks at inequality. Now, more than ever, the party is committed to addressing wealth inequality. Yet in Rhode Island, where the Democratic leadership of the General Assembly tends to side with the national Republican Party on issues, we are moving in the other direction and slashing our state’s estate tax, which disproportionately affects the wealthy.
3. Refusing to fund negotiated
raises.
Former Speaker Gordon Fox was no friend to working people, but
new Speaker Nick Mattiello is striking an even more aggressively anti-labor
profile. Although the Governor negotiated a modest $25 million in raises
for state workers, Mattiello’s budget brazenly refuses to fund them. The
precedent this sets is chilling.
2. Raising taxes on the poor and
the middle class.
Instead of one big tax hike on working people, like the proposed
Sakonnet River Bridge tolls, the Mattiello budget opts for a range of
regressive tax hikes.* The gas tax, which is very regressive, is going
up. So are the vehicle inspection fee and the good driving fee. The
property tax circuit-breaker relief program, which helps low-income Rhode
Islanders, will be axed. Repealing the 2006 income tax cuts for the rich, naturally, was off
the table.
1. Banning minimum wage increases
in any city or town.
Borrowing an idea from Oklahoma’s Tea Party government, the House
Democratic leadership is banning cities and towns from raising the minimum
wage. This is a not so subtle attempt to block the inspiring campaign fighting for a living wage for
hotel workers in Providence.
*It is an interesting question whether these new tax hikes are
more damaging than the tolls. While they are probably more regressive,
they are also probably more effective at driving environmentally and socially
responsible transportation usage.
Samuel Bell is the Rhode Island State Coordinator for the
Progressive Democrats of America. My primary interest is Rhode Island's economy
and what we can do to fix it.
- See
more at:
http://www.rifuture.org/the-5-worst-things-in-the-house-budget.html#sthash.aK9OBRj3.dpuf