A tax break proposal for high-earners – initially proposed on behalf of Fidelity Investments, but upon which other big companies could capitalize – is being billed by legislative leaders as a “job growth” initiative. But it has not exactly been embraced by the general public.
That the proposal has received a chilly reception should come as no surprise. No one likes to pay taxes. And the idea that someone is getting a special tax break because they make in excess of a six-figure salary is not going to go over well with most Rhode Islanders.
Rhode Island's Market Has Changed. Developers, Builders, Investors and Sellers Must Change With It.
By Emilio DiSpirito IV License Partner | Engel & Völkers Oceanside Leader | The DiSpirito…
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That’s human nature.
But in terms of economic development, we know that tax incentives for big companies and high-earners are a necessary tool.
If upper management at a particular company sees a more cordial tax structure in another state, that’s where they are going to want to locate their offices – or perhaps, expand their company.
Obviously, tax incentive programs must be carefully weighed. Rhode Island is a state of small businesses, and so breaks given to bigger companies must be tied to real job creation so that the economy as a whole is lifted up as a result.
But how do you sell such a proposal?
It seems to us that an ideal solution comes in the form of a proposal unveiled last week by the Rhode Island Public Expenditure Council. RIPEC believes the time is right to reduce the state’s personal income tax.
RIPEC proposes to reduce the state’s personal income tax from 25 percent to 22 percent by tax year 2007.
Accomplishing that goal would cost $31.5 million in revenues the first year, a reasonable cost when one considers that the state recently discovered a $107 million revenue overage and is now deciding what to do with the newfound money. RIPEC thinks a down payment on tax relief is a good place to start. We agree.
We simply must become more competitive with our neighboring states. Moreover, Rhode Island taxpayers deserve better than to hold the distinction of having the fifth-largest tax burden in America.
Building up aquaculture
We hope economic development officials here have taken notice to the National Oceanic and Atmospheric Administration’s new initiative to greatly expand offshore fish farming.
A report from the state Coastal Resources Management Council showed that our aquaculture industry experienced modest growth over the past year, with the value of product produced increasing by 1.6 percent, to $572,994.
That’s not an earth-shattering number. But with a national movement on to boost aquaculture efforts, Rhode Island officials should monitor closely changes brought forth by the NOAA’s efforts and where appropriate, capitalize on them.
