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PROVIDENCE - Peter Asen, Associate Director of Ocean State Action, released the following statement today in response to the business tax recommendations of the Governor's Tax Policy Commission:
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 only $50.
And yet the proposal lacks accountability and does not require corporations receiving breaks to prove it would actually create jobs. Over the past several years, Rhode Island has made huge tax breaks to the state's wealthiest and to corporations claiming they would create jobs, but all those cuts have been utter failures in achieving this goal. Unemployment in Rhode Island rose faster last year than in any other state in the country.
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.
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Robert Reich, Secretary of Labor under Bill Clinton, has a guest column in the ProJo about the essential role increased unionization would have in getting the U.S. economy rolling again. As Reich explains:
"WHY IS THIS recession so deep, and what can be done to reverse it?
"Hint: Go back about 50 years, when America's middle class was expanding and the economy was soaring. Paychecks were big enough to let us buy all the goods and services we produced. It was a virtuous circle. Good pay meant more purchases, and more purchases meant more jobs.
"At the center of this virtuous circle were unions. In 1955, more than a third of working Americans belonged to one. Unions gave them the bargaining leverage they needed to get the paychecks that kept the economy going. So many Americans were unionized that wage agreements spilled over to non-unionized workplaces as well. Employers knew they had to match union wages to compete for workers and to recruit the best ones."
As Henry Ford understood, the idea is quite simple and makes a lot of sense. When U.S. workers are paid fair wages and have job security, they have money to spend, and middle class spending is the real engine of our economy, despite what Governor Carcieri says about trickle down economics and tax cuts for the wealthiest. |
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With the economy in crisis and the cost of health insurance skyrocketing, families are struggling to make ends meet. Our representatives in Washington made us proud this week by voting to expand Medicaid coverage to hundreds of thousands of children. With champions like our own Senator's Reed and Whitehouse, hope runs high that the Senate will act soon too so more hard-working families have the peace of mind that their kids can stay healthy. Taking care of our children is the first step towards true health care reform that guarantees all Americans have access to quality, affordable health care.
Expanding the children's health insurance program will demonstrate that the era of deadlock in Washington is over and Congress is ready to make comprehensive health care reform a reality. |
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News You Can Use in the Ocean State
- "More unionization would be good for economy," guest column by Robert Reich in the Providence Journal (February 2, 2009)
- "Class war being waged in Rhode Island," column by Jim Barron in the Pawtucket Times (January 26, 2009)
- "Gubernatorial Hoovers make it worse," guest column by Paul Krugman in the Providence Journal (January 6, 2009)
- "A call to prayer for legislators," column by Ed Fitzpatrick in the Providence Journal (January 1, 2009)
- "Guarantee health reform, not higher profits," guest column by Vivian Weisman in the Providence Journal (December 23, 2008)
Reports and Fact Sheets
Ocean State Action has compiled several reports and fact sheets relating to issues facing Rhode Island. These contain information that is essential to understanding the problems our state faces, and how we can responsibly fix them to make Rhode Island work better for everyone. The reports and fact sheets address, among other issues: the health care crisis in Rhode Island, including how it affects small businesses; tax and budget policy, with recommendations of how we can responsibly fix our state's budget deficit; and a report entitled "The Next New Deal," a comprehensive look at how the nation can get back on track for a 21st century economy. There are also links to reports and fact sheets compiled by other groups with info essential to all Rhode Islanders.
See reports and fact sheets here.
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Visit the Rhode Island Policy Reporter at What Cheer! for up-to-date policy analysis and reports.
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