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Bill to raise tax on well-to-do faces uncertain outlook on Smith Hill

March 6, 2012

Supporters of a bill to raise the state income tax by four percentage points for those earning more than $250,000 a year rolled out a variety of people this afternoon to suggest broad-based support for the measure. They’ve also got a new Web site, Rhode Islanders for Tax Equity.

The MC for the afternoon news conference at the Statehouse, Jim Riley, secretary-treasurer of the local United Food and Commercial Workers union, insisted the legislation isn’t a union bill. He says the taxes of 98 percent of Rhode Islanders wouldn’t be affected by the legislation. Riley said, too, that tax cuts for the well-to-do have failed to produce new jobs.

As if to prove the point of broad support, those speaking in support included not just the bill’s sponsors, but a social worker; Pawtucket Mayor Donald Grebien; a small business owner; a homeless Rhode Islander; and a URI grad student, Danielle DiRocco. She said tuition increases at state colleges amount to added taxes on middle-class families. DiRocco said she’s carrying more than $50,000 in debt from school loans, making her doubt claims that education is the path to the American dream.

But even if the bill’s sponsors, Representative Maria Cimini (D-Providence) and Senator Josh Miller (D-Cranston), can point respectively to 36 and 17 cosponsors, the tax-hike bill faces an uphill road at best. That’s due to how Speaker Gordon Fox and Senate President Teresa Paiva Weed have offered a very cold shoulder to the idea of tax increases.

Union officials are hopeful of sparking a broader debate, framing the issue as one of “tax fairness.”

Here’s how Miller and Cimini answered my question about how they’ll overcome leadership opposition:

Miller pointed forward to the May revenue estimating conference:

This is part of a dialogue, this is part of the hearing process. There will be a point where either revenue is needed or not needed. We have to look at the most fair options that we have, and I think this will get a fair hearing based on the credibility of this approach and the fairness of this approach versus the other approaches to raise revenue.

Cimini cited what she called a “groundswell for support of this,” in terms of dozens of House cosponsors.

Though the leadership may not be inclined to jump on the increase [the] tax bandwagon, I do think they have to realize that there’s need in our state. And we’ve cut and we’ve cut and we’ve cut, and I don’t think that there’s anything left to cut. And I think we have to look at other options.

But it wouldn’t be surprising if the General Assembly wipes out Governor Lincoln Chafee’s proposed two percent hike in the meals tax, particularly if revenues look better in May. Leadership support for the Cimini-Miller bill would be even more startling.

2 Comments leave one →
  1. March 7, 2012 2:48 pm

    It is unclear to me how anyone can think that by increasing the income tax 66% Rhode Island will be doing anything positive for her economy.

    Rhode Island is in competition with Connecticut and Massachusetts in terms of our tax rates. If Rhode Island is 66% more expensive in terms of income taxes paid by high earners then it logically follows that those high earners will bias away from Rhode Island to take advantage of lower taxes at our neighboring states.

    Rhode Island cannot afford to be on the bleeding edge of tax policy. While I believe that nationally the rich should pay a higher share than they currently do now (especially the notorious tax breaks enjoyed by the hedge fund folks), Rhode Island will only suffer if we increase our income taxes and our neighbors do not.

    Rhode Island’s economy is in the tank in no small part due to many years of being not competitive in terms of our taxes and financial stability relative to our neighbors. Our taxes were only brought into line with our neighbors last year and already we have multiple bills to send the rates soaring – a major ‘keep out’ sign to anyone from outside Rhode Island considering locating a business in our state.


  1. The Saturday Morning Post: Quick hits on politics & more in RI | Blogs

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