A not-so-modest plan for tax reform in Rhode Island

Guest Column:
Tom Letourneau
An awful lot has been espoused of late supporting the elimination of the sales tax in Rhode Island. In theory I can’t say that I disagree with the many pundits promulgating the idea – or, maybe I should say I don’t fully agree with them. More

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OP-ED/LETTERS TO THE EDITOR

A not-so-modest plan for tax reform in Rhode Island

Guest Column:
Tom Letourneau
Posted 3/25/13

An awful lot has been espoused of late supporting the elimination of the sales tax in Rhode Island. In theory I can’t say that I disagree with the many pundits promulgating the idea – or, maybe I should say I don’t fully agree with them.

One has to assume that everyone’s situation is different from another’s. As such we might have differences of opinion on a given subject.

That difference of opinion is proved with an editorial in our statewide newspaper wherein the call is being made to “Phase-out the Corporate Tax.”

While I, again, somewhat agree with those who have taken the position of eliminating both (or either) of these taxes, I do have what I feel are legitimate concerns for the elimination, in its entirety, of our sales tax.

As a former dealership-development and business-management manager for the Eastern United States for GM’s former Saab Cars U.S.A. division, now retired and a senior all but living hand to mouth, I have to spend almost every available penny on items that this state loves to tax and that seniors tend to spend a lot of their meager funds on.

This includes “prepared meals” at grocery stores such as Dave’s Marketplace, Shaw’s, Stop & Shop, etc.

A sales tax can be very unfair to those who fall into a middle-income bracket and below because it is, in some situations, regressive.

Having for years worked in and lived in New Hampshire, while still maintaining my residence here in Cumberland, I saw the effects of a state having no sales tax, as well as no income tax. The result was through-the-roof, and for many, unaffordable, property taxes.

On the other hand, now having a second home in Florida, I see that Florida has a sales tax and no income tax, as well as reasonable property taxes.

I still pay all my taxes here. I also keep all vehicles registered here in Rogues Island, and I pay my taxes on them to the Cumberland.

One of my closest friends, formerly from Cumberland, another of the mass exodus of thousands out of Rogues Island, now lives in Ft. Mill, S.C. He has, on a number of occasions, showed me his property tax bill, in which special considerations are given to seniors, who are exempt from paying that percentage of the annual county property tax that funds the county school system. The thought process, and logic, being that seniors have paid more than their fair share their entire lives, now is the time to give them the consideration they deserve … a consideration that should be closely looked at here in Rhode Island. And yes, in the Palmetto State, residents pay sales tax but no income tax.

Rhode Island is one of three states in the United States with no form of county or regional government. Regional government can help keep taxes on the low side since multiple and unnecessary levels of overbearing, bureaucratic government do not exist, especially within school systems.

As a matter of fact, there are probably more than 50 county-wide school districts around the country for which the county’s student population exceeds the entire student population of Rhode Island. Yet Rhode Island sees fit to carry on with 35 little school-district fiefdoms.

If our legislators here in Rogues Island could ever get it through their thick skulls that it is their job to look after the needs of all of this state’s citizens, not just their special- interest friends, especially those within the public-employee-union segment, a dominant force in our state’s government, and put a stop once and for all to the excessive wasteful spending that has been de rigueur for far too long, they might be able to put in place some mild reforms that could be phased in over a short period of time and that would be beneficial to all segments.

• As to our sales tax – bring it fully in line with our neighbors, thereby taking away the incentive for Rhode Islanders to shop elsewhere for the savings that can be achieved, especially in Massachusetts.

• Eliminate in its entirety the automobile excise tax, a tax that is almost nonexistent elsewhere.

• Eliminate the state income personal tax for all of what should be the most obvious of reasons … need I state them all? A little common sense here, please.

• And, in working toward these goals, until the elimination of the state income tax is fully phased in, please stop taxing our seniors’ state income tax on their Social Security income. It is their own money, stolen by the federal government, finally being returned.

• Lastly, immediately restore, again until the state income tax is fully phased out, the deductions for home mortgage interest and especially all of one’s medical expenses, something that would be a tremendous help to seniors and Rhode Island households that, unfortunately, have to incur mountains of these kinds of expenses. •


Tom Letourneau is a retired automotive-industry executive. He also served as vice president of the Cumberland Town Republican Committee.

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