Carcieri panel looks to slash corporate taxes
UPDATE: Pat found the ProJo account not so much to his liking. His take is here.
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As I wrote earlier this week, Governor Carcieri's supporters will see it as a feather in his cap if he can make headway on closely held beliefs, like the idea that cutting taxes on business will boost Rhode Island.
Garry Sasse appeared today on Buddy Cianci's radio show, and Neil Downing has details on Carcieri's tax-reform panel proposal:
Governor Carcieri's tax-reform panel today recommended scrapping Rhode Island's corporate income tax.The proposal, if adopted, would save businesses more than $82 million a year. It would also send a message that "Rhode Island wants to do business," said Alfred J. Verrecchia, chairman of Hasbro Inc. of Pawtucket, a global maker of toys and games.
Edward J. Cooney, vice president and treasurer of Nortek Inc. of Providence, a maker of building products, called the proposal "a bold initiative that gives Rhode Island the opportunity to create jobs."
Kate Brewster, executive director of The Poverty Institute, a nonpartisan think tank at the Rhode Island College School of Social Work, said there is no evidence to suggest that cutting the corporate income tax will result in job creation.
"Overall, this proposal is a huge gamble of taxpayer dollars . . . and the gamble is not something the state can afford to make," Brewster said.
Carcieri formed the panel earlier this year to propose changes to the state's overall tax structure to make Rhode Island more competitive with other states, especially Massachusetts and Connecticut.
Ocean State Action has this response:
Why would the Governor's tax policy commission want to provide $38.8 million in tax giveaways to 50 of the largest corporations that do business in Rhode Island? At a time when taxes have already been shifted too far away from large corporations and onto middle class families, and when Rhode Island faces a serious budget deficit, this proposal to eliminate the corporate income tax is both deeply unfair and totally irresponsible. The largest corporations in America have received enough bailouts at the expense of low- and middle-income families.
Under this proposal, the fifty corporations with the highest taxable income would see a windfall of nearly $40 million dollars in tax cuts, or more than three quarters of a million per corporation. Meanwhile, more than 90 percent of corporations would receive a symbolic tax cut of $50.
We oppose the alternate proposals to lower the corporate rate because they would reduce state revenues, again forcing more responsibility for funding state government onto middle-class families. The Assembly should indeed institute combined reporting to ensure that multi-state corporations are paying their fair share, but not combine it with a corporate tax cut that will reduce the amount corporations are paying.
Middle and low-income families and small businesses are hurting in this state, and cuts to local aid as the governor has proposed will only make the situation worse by forcing increases in the unfair property tax. These are the problems that real tax reform must fix.
