Representative Larry Valencia (D, Richmond, Hopkinton, Exeter) just issued a press release claiming his “tax equity bill reflects shared sacrifice.”
“For almost 10 years, the burden has only trickled down on working families,” he said. “We have seen increases in property and car taxes, which largely affect a bulk of the state’s most vulnerable population. Additionally, we’ve seen cities and towns cut essential programs and staff, making the lives of our constituents more difficult. We need everyone to contribute, not just small businesses, the middle class, the elderly and the poor.” …
“We can choose to remain at the status quo and watch economic conditions remain the same. Or we can create jobs and restore public services and programs, and further protect and improve the quality of life for all Rhode Islanders.”
Not surprisingly, the release trumpets the support of “longtime policy analyst” Tom Sgouros, who is also the government unions’ favorite policy analysis and a far-left voice on RI Future. Also not surprisingly, it offers not one bit of policy theory or quantitative analysis.
As it happens, in the course of my work today, I ran Valencia’s proposal through the RI Center for Freedom & Prosperity’s RI-STAMP modeling tool, from the Beacon Hill institute at Suffolk University. To be more specific, I ran the closest thing that the tool allows: Valencia’s bill would raise the income tax to 10% for any individual earning over $200,000 per year, or $250,000 for couples filing jointly. I ran the 10% for everybody over $250,000, so in that sense, my estimate of the damage that the bill would do is conservative.
After the dust settles in year one of the legislation’s implementation, Rhode Islanders in the private sector would have lost a total of 1,262 jobs, while the state government would gain all of $77.17 million. Put differently, for every $61,149 added to the state’s general revenue, there would be one fewer working Rhode Islander.
Some of those folks would simply lose their jobs, but others would leave the state. According to the model’s results, the number of Rhode Islanders with income over $150,000 would decrease by 2.38% from what it would otherwise have been. Whether they would be unemployed or paying income taxes somewhere else, we would have to wait and see.
If we think of taxpayers as real people who will react to policy changes — rather than statistics or faceless and vilified The Rich — these results are hardly surprising. Which leads to the conclusion that the legislators who sponsor such bills either do not think of Rhode Islanders as anything other than game pieces in a political match or have a very strange understanding of “shared sacrifice” and “equity.”