In Rhode Island the Democrats have discovered that their state has to compete in the area of taxes.
So they are proposing to flatten their income tax. The highest rate is 9.9%; lowest 3.75%. They are proposing 5.5% for everyone. The Wall Street Journal (paid subscription required)
reports:
And listen to how House Speaker William Murphy pitched the idea at a news conference: "The ultimate goal is to put more money directly into people's pockets both by giving relief to those who need it and by making Rhode Island a more attractive place for business that will provide high-paying jobs for more Rhode Islanders." What's going on here? Have the state's liberals all taken Art Laffer happy pill
Their neighbors have lowered taxes and they see their state dropping behind.
In a recent survey by the Boston-based Beacon Hill Institute -- which measured the economic competitiveness of states based on their ability to generate income and growth -- Rhode Island ranked 37th, or well behind Massachusetts, Vermont, New Hampshire and Connecticut, which were all in the top 20. Only two years ago, Rhode Island ranked 22nd in the same survey.
But watch the comical partisanship. Who is against making their state more competitive?
Rhode Island Republicans, including Governor Don Carcieri, were also caught off guard by the Democrats' proposal and now sound like Beltway Democrats in raising objections. House Minority Leader Robert Watson has said he'd like to know how the Democrats "plan on paying for these tax cuts." A spokesman for the Governor had a similar cart-before-the-horse mentality, telling the Providence Journal that "the governor hopes to work with the General Assembly to make the spending cuts necessary to enact real tax relief."
But opposing good policies out of partisanship isn't going to make Rhode Island a more attractive place to work and invest. Tax cuts will. Republicans might try congratulating Democrats for their supply-side revelation, and then join them in doing right by taxpayers.
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