Part of the fun of watching public policy debates is to catch the internal contradictions and illustrations of priority. A headline from today’s Providence Journal points to a great example: “R.I. tax data shows no mass exodus of the wealthy.”

The source is a report from the state Office of Revenue Analysis, which used to be a pretty dry bureau (albeit one of my favorites) for state revenue data, but appears to be in the process of repurposing to the mission of disproving the thesis that Rhode Island’s economy is in bad shape and that government policy is a major reason. Two weeks ago, I addressed the claim of director Paul Dion that unemployment data is all kinds of flawed and not really a good gauge of how well the economy (and the government) is doing in Rhode Island.

Some of the report’s findings are interesting, but I’m not sure how useful they are (which reporter Randal Edgar notes). There’s no comparison to whether other states lost more or fewer than 13.5% of their wealthy residents. The researchers picked two years to compare as if out of a hat. And so on.

Even accepting the data as presented, though, I’d suggest that the take-away message is the opposite of that proclaimed. Applying a net loss of 741 wealthy taxpayers from the 14,601 Rhode Islanders who accounted for 33.5% of the $1.07 billion in personal income tax, that year, means a loss of $18.1 million in tax revenue each year.

Of course, there are complicating factors. If those who left skewed toward the wealthy side (which is plausible, since they’d have more incentive to leave), then the number would be higher. On the other hand, if those who left made less money in subsequent years, then the annual loss would be smaller.  Still another consideration is the potential loss of other tax revenue, like sales and property taxes.

Be that as it may, an $18.1 million hit to the state budget is more than the controversial 38 Studios debt payment this year and almost as much as the controversial HealthSource RI operating budget. Sniffing at that as something short of a “mass exodus” is to dismiss a potentially very real problem.

Of course, if the higher ups in state government wanted some insight into the question of who’s leaving Rhode Island, they needn’t have used up the time of their expensive in-house economists. They could simply have looked up the work of an unpaid blogger (and carpenter), beginning in 2007 (my favorite, here) or turned to the RI Center for Freedom & Prosperity’s 2012 study.

The real danger to Rhode Island isn’t the loss of taxpayers who may make a lot of money in any given year. It’s that the general tax and regulatory environment here is driving out the working and middle class people who have the most incentive and motivation to innovate and strive. In other words, the more disturbing exodus is of the people building lives and families who contribute to the economy in a variety of ways… not the least of which is creating new opportunities for jobs and becoming the newly wealthy.