Friday, October 31, 2008

Taxes, taxes, taxes

Projo ran an interesting article the other day wherein they mentioned the Guv's wanting to eliminate income tax. Instead he wants to tax expenditures because... he does. Oh, wait a minute. It will grow jobs, yeah, more trickle-down economics which has worked so well not only for the state, but the entire country as a whole. I thought that this was why we enacted the flat tax for R.I.'s wealthiest tax payers (over $250,000) & reduced the capital gains tax? So...where's the jobs?

This year alone, the state’s income tax is expected to generate $1,124,235,000 for the state and the corporate income tax $161 million."

So 42 states have no income tax: "New Hampshire (which taxes investment interest and dividends only), Tennessee, Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming." Yes, we have a lot in common with those states.

"Rhode Island ranks 24th-highest in the percentage of personal income gobbled up by personal income taxes and by the same measure, 28th-highest in corporate income taxes and 38th in sales taxes."

R.I. often ranks highly in various tax surveys that lump all taxes together because of our property taxes. It's not the sales tax, or the income tax, or the corporate tax- it's the property tax, stupid. And this doesn't appear to offer any help here.

The problem now of collecting taxes will fall on...guess who- small business. You'll need extra bookkeeping, of course. And suppose you can't collect? And who is going to enforce all this? How are you going to trace it out, let alone base revenue projections accurately? Yeah, the devil's always in the details. How much extra will small business end up charging to cover all this new overhead cost?

Sounds good until you actually get to the how-to's. So, how much are we all going to save? How much is all of this going to cost? Europeans generally tax both- income & expenditures. I just don't see how you can keep gov't functioing by taxing only the later. But maybe, that's the point. Am I favor of tax reform? But what poses as a simplistic solution is anything but. If it sounds too good to be true...

Thanks to Projo reporter Katherine Gregg for all the info
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