More than Just a Tax Increase from Raimondo

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With unemployment in Rhode Island heading in the opposite direction of the country as a whole, you might think Democrat Governor Gina Raimondo would avoid new taxes specifically targeted at businesses.  If so, you would be wrong:

Raimondo wants to restore a limit on the amount of business losses that can be deducted from state income taxes, after the federal CARES Act coronavirus relief bill eliminated it for the last three years. The increase in deductions allowed by the CARES Act is estimated to cost the state $29 million over two years.

In this case, the tax itself isn’t even the worst part.  This particular method for raising taxes could send business owners back to their accountants to revise tax forms already submitted, some of them for a second time.

Generally, economists argue that taxes should be designed to affect the economy as little as possible.  Moves like Raimondo’s ignore this principle… and then amp it up to a higher level.  This sort of policy not only takes money out of the productive economy, but it also sends a signal of vulnerability and unpredictability to all businesses.  As an initial pass, they have to figure a higher tax burden into their plans.  They then must put an asterisk on their planning because they can never know if the tax they’re paying this year is actually the tax they’ll be forced to pay, even when they thought they’d closed the books on the year.

Raimondo’s record on employment in Rhode Island has been characterized by top-down control and an ongoing PR effort to spin which numbers are promoted.  Our state’s record following the COVID-19 recession shows her approach simply doesn’t work.  And now she wants to make things worse?



  • Lou

    “and an ongoing PR effort to spin which numbers are promoted” Isn’t that what you have been trying to do (less successfully) over the past few years?

    • ShannonEntropy

      You really believe Justin is trying to “spin” the numbers and stats he presents here ?? Instead of just insulting him, why don’t you show us where he’s wrong ??

      Meanwhile, the way Queen Gina treats data makes a Fidget Spinner look like a Pet Rock. Remember how she buried the RICAS test results until after the 2018 election ?? Surprise!! Turns out they were abysmal, who would have guessed ?? (( Me, for one )):

      https://www.golocalprov.com/news/is-raimondo-delaying-test-results-until-after-election

      • Lou

        Maybe you should pay attention instead of spouting off without knowing what you are taking about (again). Virtually every time Justin posts his bogus unemployment index I question its veracity. Justin’s index restates unemployment numbers using population data from more than a decade ago. In short, it’s less valid than your calculation of the CPI!

        • ShannonEntropy

          So what if he uses decades-old population data ??

          In 2001, the population here was 1.058 million. Last year it was 1.059 million

          Now you can make the argument that a LOT of old rich white people — like some of my educated, professional neighbors here in PV — took their money and their pensions and moved to (( mostly )) Florida; and that they were then replaced with illiterate unskilled immigrants, which skews interpreting the data

          I picture my gainfully employed neighbor retiring and moving away, being replaced with an immigrant who moves here to live off our no-minimum-residency-required system of SNAP food stamps, Section 8 housing, and Medicaid. Data skewed all right

          BROKE: Rich old white guys paying for everything

          WOKE: “Inner city” welfare recipients threatening to burn everything down if we don’t give them even more

          • Lou

            Great, the guy that doesn’t understand how CPI is calculated is going to explain why Justin’s phony unemployment numbers are valid without even knowing what they are.

            Your anecdotes aside (which actually supports that Justin’s numbers are bogus), if the “illiterate unskilled immigrants” who replaced “educated, professional neighbors” are working then it’s neutral to the unemployment rate.

            Justin’s flaw is not acknowledging an aging workforce leads to a higher number of retirees. He maintains that the because there are less jobs now than decades ago (while maintaining a steady population) it proves something terrible. No doubt the work of the evil “dictator”/governor.

            “Non-partisan” Justin doesn’t like the real numbers because they show unemployment was 11% when Carcieri left office and down to 3% under Raimondo, so he makes them up.

          • Justin Katz

            I know your purpose is to disagree with me first and to honestly address facts only if your first priority permits it, but I do want to correct a few things for the record:

            1. The index we maintain does not measure labor force against its size a decade ago. That’s a separate chart I’ve continued because I think it’s interesting, and you like to fixate on it because you think you’ve got an argument against it.
            2. The index compares Rhode Island with other states, and an aging population affects the entire country.
            3. You can disagree with numbers and their relevance, but that doesn’t mean they are “made up.”
            4. If a person retires, the business for which he or she worked has two options: deprecate the job or find somebody else to fill it. Rhode Island lost a lot of jobs in the Great Recession, and they weren’t filled. If that’s because people retired, fine, but it’s still a matter of concern our economy isn’t filling jobs when people leave. Imagine an individual company that had 50 employees ten years ago and only 25 today. If somebody pointed out that the company was employing half as many people, it would be odd to say the decrease doesn’t matter because some portion of the 25 actually retired.

          • Lou

            “an aging population affects the entire country”, yes, but the point is does if affect all states equally? You know the answer is no, but you fail to account for it.

            The source numbers may not be made up, but certainly the bastardization and manipulation of them to support to a preordained conclusions are.

            “our economy isn’t filling jobs when people leave” that’s the point of the official unemployment rate. Just because you don’t want to believe it and need manipulate it for political purposes is on you.

            Not sure what your point is with your company. If sales dropped in half (think video stores) or they became more efficient in what they are doing it really doesn’t prove anything except the company got smaller (maybe even more profitable). I’m certainly not going to draw any conclusions about the Governor because of an anecdote.

          • Justin Katz

            Well, golly gee, you’re correct. The aging population does not affect the entire country equally. From 2010 to 2019, the percentage of the population over 65 increased by 22% in Rhode Island. That looks big, but the increase for the country as a whole was 26%. By your reasoning, Rhode Island’s employment picture should have improved relative to the rest of the country.

            The disparity grows larger if we look at absolute numbers rather than percentage of the population. The population over 65 increased 23% in Rhode Island, but 34% across the nation. Why did RI employment growth lag the nation?

            Because Rhode Island’s economy is not growing as much. This isn’t really an arguable point. Do you still want me to “account for” that difference in my assessment of RI’s economic performance?

            We can keep going, tracing this over one statistic to another, but eventually, you’re going to get to the point of admitting that you (whoever you are) benefit from the state’s corrupt sclerosis and like it that way, whether because you gain financially or just from the good feeling of agreeing with powerful people.

  • Monique Chartier

    The numbers don’t lie: Rhode Island now has the second highest unemployment rate in the country. The state started the lockdown with
    an overall tax burden in the top 20% and a notoriously bad business climate which was then exacerbated by businesses LITERALLY being shut down by the needlessly prolonged lockdown. Yet confronted with this scene of wreckage, the governor is proposing tools of destruction rather than tools of repair. Remarkable.

    • Lou

      I believe you are actually using real unemployment numbers and not Justin’s fantasy “freedom” index.
      Have you given up promoting your hospital capacity lie about the pandemic?

    • ShannonEntropy

      And the really ironic thing about Gina’s lockdown and now tax policies is that the cure is worse than the disease it was supposed to prevent

      Sweden proves that, and now even the UK is starting to wake up and see the undeniable reality in front of its eyes:

      https://www.rt.com/uk/501767-uk-excess-deaths-lockdown-coronavirus-heart/

      • Lou

        For a self-proclaimed “patriot”, you are awfully fond of citing foreign media sources and criticizing our national pandemic response. Who you hold responsible for the failure of our national response? Are you so brainwashed that you can’t bring yourself to hold the Orange Fuhrer accountable?

        • ShannonEntropy

          http://disq.us/p/2c6d6kg

          When Trump closed flights from China in February, liberal Dems called him “racist” and “hysterical”. So I guess things would have been a LOT worse had Hillary been in charge

          And I blame Gina for the mess Li’l Rhody is in… 90 yr olds are dying in nursing homes so I can’t grab a beer at my local pub ?? And I know people whose jobs are gone and never coming back thanks to Gina…. SMFH