Raise Sales, Not Taxes

It is not the best of times, so it is the worst of times to raise taxes. But it seems that Rhode Island’s political leaders, after the brutal health and economic impact of this pandemic, care more about their precious state budget than they care about our family and business budgets. What they don’t understand is that, for decades, the state budget, and all the taxes and regulations required to support it, has actually been the problem itself — the albatross around our state economy’s neck — dragging down taxpayers and job-producers.

But “preserving the budget at all costs” — no matter who suffers — is the status-quo approach they will take when they finalize the 2021 budget in special sessions this fall.

Recently, my organization launched its RaiseSailsNotTaxes.com campaign, which reminds lawmakers that raising taxes during an economic downturn will lead to more job losses, more business closings, more out-migration, a slower and longer economic recovery — and more poverty.

Conversely, Rhode Islanders can look to a more prosperous future if lawmakers instead take the path of reducing spending, as has virtually every family and business in our state after the government-mandated shuttering of our economy. Only with more and better jobs, created by more and better companies, can more Ocean Staters enjoy a better quality of life, perhaps even being able to buy a sailboat.

With the worst business climate in America, pre-pandemic Rhode Island was already suffering chronic relative loss of population, below-average jobs recovery and stagnant economic growth because of excessively high taxes and regulations. Now, we are among the hardest-hit states when it comes to unemployment and major GDP loss, post-pandemic.

How tone-deaf can the political class be? We have been crushed by this virus in so many ways, and now they want to stomp big-government’s boot even harder upon our backs while we’re down? Government must live within its means, just like we all had to.

Facing a near-billion-dollar state revenue shortfall for 2020 and 2021, government unions, along with left-wing advocacy groups and progressive lawmakers, have put forth proposals to increase debt and to impose new or higher taxes and fees on a dizzying array of products and services, including:

  • The re-imposition of sales taxes on wine and liquor;
  • A carbon tax that would raise the price of gasoline, home heating fuel, and propane products;
  • A TCI Gas Tax that would add a further 17 to 24 cents per gallon;
  • Close to $1 billion in new bonded debt, forcing tax hikes on all of us today and also upon our children and grandchildren in the future;
  • A new tax on high-income earners, which will reduce business investment and drive more people out of state;
  • A halt to the car-tax phase-out;
  • Increased building and permit fees; and
  • New taxes on deliveries, as well as on hunting, fishing and recreational shooting.

But you can help defeat tax increases. One of our coalition partners has put forth a Taxpayer Protection Pledge and is tracking General Assembly and federal candidates who take it. Another partner is encouraging citizens to take the Taxpayer Election Pledge, under which voters promise to support candidates who oppose tax increases.

The governor and General Assembly have made no signal that they are preparing to face reality, instead fantasizing that the federal government will bail them out. Worse, unless citizens and employers step up and take action, the political class, in addition to tax and fee increases, and in seeking to maintain status-quo spending levels, unbelievably, is suggesting massive new bonds for special projects that will drive our state into even deeper debt.

Because we are not in the best of times, now is the worst of times to raise taxes.

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