Providence, RI - Ironically, Rhode Island's political class, incessantly in
search of new revenues, is criticizing the recently passed "Tax Cuts &
Jobs Act", which could generate more statewide revenues in a more
responsible way than any other scheme they have devised themselves.
The RI Center for Freedom & Prosperity
points out that because individuals and businesses necessarily reside in some
state, that the economic growth - expected to result from the federal tax
reforms - will lead to a boost in state revenues.
In Rhode Island:
With about 80% of its
residents soon to keep - and spend - more of their hard-earned paychecks ...
state sales tax revenues will increase
With more businesses to
keep more of their profits, more and better paying jobs will be created ...
resulting in more state income tax revenues
With more businesses
earning more profits and pass through incomes ... more capital gains tax and
normal income tax revenues will be collected, not to mention increases to
individuals' 401k or other equity positions
And, best of all for Rhode Island, it's the
federal government that must deal with the positive or negative budget
implications ... meaning that the state revenue increases described above come
with no strings attached and with no risk.
Further, the reality of the federal reforms,
often the target of scorn by the Rhode Island's political leaders, could mean
that more businesses choose to relocate or become established in American, and
in states like Rhode Island.
"It is alarming that state officials
would deny tax cuts to families and businesses, just to advance their partisan
class-warfare narrative," commented Mike Stenhouse, CEO for the
Center. "Because of these federal tax reforms, Rhode Island will no longer
need to subsidize taxpayer-funded corporate hand-outs in order to see more and
better paying jobs organically grow in our state."
On the negative side, under the reforms passed
today, because state and local income and property tax deductions (SALT) will
be limited to ten thousand dollars per year, high-income households and
high-value property owners may end up paying more in taxes. This unfortunate
circumstance should not be blamed on the federal reforms but, rather, on the state
and local governments who have been excessively imposing taxes on its residents
... and which have unfairly relied on federal taxpayers in other states to
subsidize their high levels of taxation.
The Center has long-maintained that Rhode
Island's corporate welfare based economic development strategy is not
sufficient to spur robust economic growth and jobs creation. Instead, the
Center has advocated that broad-based, pro-growth tax and regulator reforms -
like those that just passed the US Congress - that will lessen burdens on every
business and most families in our state - are the only means by which more and
better companies will produce more and better-paying jobs.
According to the Center, it is organic
economic growth, not corporate welfare schemes, that can alleviate the problems
suffered by Rhode Island employers and families ... as exemplified by bottom-10
national rankings in such broad-based indexes as: overall state business
climate; Family Prosperity Index, Jobs & Opportunity Index; occupational
licensing burdens; and the recently released poverty report.