Skip to main content

Bill would tax the rich

May 11, 2011

PROVIDENCE — If the state is going to talk about “shared sacrifice” to help eliminate a $300 million budget deficit, then those at the very highest income levels should be asked to sacrifice as well, a freshman state representative said Tuesday.
Democratic Rep. Larry Valencia of Richmond proposed what he called the 95/5 Civic Responsibility plan, which would impose a 4.1 percent tax on incomes above $200,000 annually for an individual or $250,000 for a couple. Adding that tax to the top 5 percent of wage earners could bring in as much as $130 million in the 2012 budget year that begins next July 1.
“Let’s get real,” Valencia told a Statehouse press conference, “nobody wants to see a loss of services, especially when we all need them. Do you want fewer workers fixing bridges damaged by last year’s horrendous floods? Do you want to cut services to the elderly, or food assisatance to children? Of course not.”
Valencia said he is also concerned about government waste and mismanagement, which is why he has introduced legislation to create an Office of Inspector General. But that is not enough, he said.
“A revenue-based solution is a must,” Valencia added, “and this tax equalization plan is a responsible and fair approach. Years of misguided tax breaks for the most fortunate have created the revenue crisis we find ourselves in. We simply can not cut our way entirely out of this crisis. And the state must stop passing the buck to cities and towns, who in turn are forced to raise regressive taxes like the property tax and the car tax.”
Valencia said the median income for workers in Rhode Island is only $67,000 and it is much lower in cities. It is $23,000 in Providence, for instance.
“It is mostly the top management from financial institutions and executives at large corporations along with a fortunate few entrepreneurs and a rare artist her and there who earn top salaries — the fortunate 5 percent of the population, some of whom inherited their advantage,” he said. “And some of these caused the crisis, particularly in the banking and real estate sectors, and some of them even got bailed out by the government. It is time for them to give back and pay their fair share. This is not the time to keep the burden on the elderly with fixed incomes and the working people of Rhode Island.
Valencia said it is a matter of “justice and civic pride” that this small group is asked to make a sacrifice.
Kate Brock, executive director of Ocean State Action, said she hopes Valencia’s legislation “will spark an important debate and conversation in Rhode Island that will extend long beyond this year’s (legislative) session and inform the General Assembly’s work going forward. We need to have a real conversation about what tax breaks for the wealthy are doing to our state and about the regressive nature of our state’s tax structure.
“We all know the fairest and most responsible way to raise revenue is a graduated personal income tax structure,” Brock said, “one that ensures that the wealthy pay what they are able to pay — that the top 5 percent of Rhode Islanders must be required to pay their fair share.
Tom Sgouros, a onetime candidate for General Treasurer, said when the General Assembly proposes a tax, people show up at hearings and say, “I’m going to move, I’m going to move, I’m going to move.
“They talk about requiring shared sacrifices, but what they are talking about is shared sacrifices for everyone else,” Sgouros said, pointing to studies he said conclude that, most people don’t move when taxed are raised and public services are improved.
“That’s the way the world works,” he said. “We levy taxes to pay for services.”
Under questioning from the media, Valencia acknowledged that the chances of his bill passing this year “are not great.” He added that he is elected for at least two years and will keep pursuing his plan during his tenure.

 

Premium Drupal Themes by Adaptivethemes