Tax Credits Need Transparency

With tax credits geared toward economic development, the state reports the companies that receive the vouchers but keeps no track of their travel after that.  Brokers who buy them and thereafter distribute them to accountants and taxpayers operate completely behind the curtain.  For a segment on Channel 10 news, last night, Bill Rappleye asked me about the problem.

As the RI Center for Freedom & Prosperity notes, tax credit and other “corporate welfare” programs corrupt notions of capitalism and lend themselves to back-room deals and economic inefficiencies. It would be better to apply those resources to more broadly based policies, like sales tax reductions.

 



  • Kevin McCarthy

    Anybody at the State House ever hear of E-Bay? I am an agnostic on the benefit of issuing various credits. I have heard good arguments on both sides of the issue. However, once issued, why not have the DOR establish a web page where they could be sold to the highest bidding taxpayer. There is no reason they would not be sold for .98 or .99 cents on the dollar. They are essentially free money to the taxpayer who buys them to reduce his tax bill. Now they are just private sales in a secret over the counter market. A little technology and transparency would solve this problem, and alleviate the role of the connected insider.

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