When the Insiders’ Cut Comes First

Even if you’ve disagreed with everything I’ve ever written, take a moment to ponder the thinking on display in this Kathy Gregg article.  It’s about a study from the left-wing Institute on Taxation & Economic Policy finding that Rhode Island places a high tax burden on lower-income families.

Nobody is claiming that Rhode Island doesn’t already have a high tax burden on everybody in every income group.  Gregg notes that middle-income families lose a large amount of money to property taxes.  She highlights the reality that the income tax is already relatively progressive, giving high standard deductions at the low end and restricting itemized deductions at the high end.  “The biggest disparity,” she writes, “is the proportion of income eaten up by sales and excise taxes.”

And what do the progressives and their allies in the labor unions conclude?

Kate Brewster, executive director of The Economic Progress Institute in Rhode Island, viewed the report as ammunition for the campaign by organized labor and others to persuade state lawmakers to ask the wealthy to “pay a little more” by creating a new [income] tax bracket.

So, the answer to a sluggish economy, high unemployment, and a high tax burden that disproportionately harms low-income families is to increase the burden even more, while transforming the “most fair” tax into outright redistribution to compensate for the “least fair” taxes?  That’s lunacy.

Or rather, it would be lunacy if there weren’t an absolutely rational explanation for it.  Brewster and her gang benefit directly from the money that the Rhode Island government removes from the local economy.  They’ve sliced up the multibillion-dollar pie, so ensuring that the total only ever grows is the starting point for their analysis.

If an even distribution of taxes by percentage of income is desirable, then the most fair thing to do is obvious.  A state that already has a high tax burden should eliminate the tax that harms those on the bottom end.  It should eliminate the sales tax, helping everybody all around by leaving more money in Rhode Islanders’ pockets while improving the overall jobs outlook and economy.



3 Responses to “When the Insiders’ Cut Comes First”

  1. Monique
    January 30, 2013 at 8:41 am #

    "“The biggest disparity,” she writes, “is the proportion of income eaten up by sales and excise taxes.”"

    Wow. That falls exactly into the case that the RICFP has been making. Did the Center commission this article???

  2. Monique
    January 30, 2013 at 9:48 pm #

    Of course, the main point here is, if the state and locals weren't doing (read: spending) so much for so many (special groups), they wouldn't need to raise so much from the poor via the REGRESSIVE income and excise taxes.

  3. Dennis
    January 31, 2013 at 11:02 am #

    We are already over taxed and RI wants more. Top 5 unemployment, top 5 in taxation, top 5 of people moving out of state, top 5 in social enablements. Why not take more and go for number one.

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