RHODE ISLAND taxpayers can be faulted for many things, but a lack of generosity to public-employee unions is hardly one of them.

Many families here face crushing, ever-rising property taxes — and a steadily diminishing standard of living — to pay for extraordinarily generous compensation for government employees. At the state level, pension benefits are so munificent that they are clearly no longer sustainable, even with some of America’s highest taxes, taxes that are driving out jobs and hope, leaving Rhode Island among a handful of states in recession. This spending is helping fuel a massive budget deficit that threatens services for the poor and the state’s economic future.

But are the employees grateful to the taxpayers? What do you think?

Last week, the public-employee unions held a rally at the State House, complaining about their lot in life and insisting that the problem with Rhode Island is that its taxes are too low.

“The rich got tax cuts and all I got was this lousy t-shirt!” was the message on T-shirts emblazoned with the logo of National Education Association Rhode Island.

All they got? Do they have any idea how their friends and neighbors are suffering and sacrificing for their benefit? Do they even care?

That’s not just a T-shirt slogan, unfortunately. The public-employee unions seriously believe — or, at least, incessantly argue — that higher taxes, specifically on the “rich,” are the way out of the Ocean State’s crisis.

They are either remarkably slow learners or cloaking their true convictions. Because this is not rocket science. It’s basic economics.

Rhode Island is America’s smallest state, a flyspeck to the wider world, without an overpowering economic draw (such as Manhattan has). The hated “rich” — the people who decide where to live and locate their companies — can easily steer clear of the state. Raise taxes too high, and the state will lose revenue. The rich will not come, and those who are here will leave, taking jobs, tax dollars, charitable contributions and economic opportunity with them. (For that matter, many Rhode Island public employees leave upon retiring to avoid the taxes.)

So Rhode Island, with America’s 11th highest tax burden as a percentage of personal income, is in the economic dumpster. It is not competitive with its next-door neighbors, Massachusetts (37th) or even Connecticut (20th).

House Speaker William Murphy has actually tried to do something about this. He pushed through a reform that would bring Rhode Island’s income taxes on a slow glide path toward parity with the Bay State’s. He won national attention with the move, which helped advertise the Ocean State as trying to get its house in order.

This — an attempt to gradually become competitive with Massachusetts, never mind the country or the world — is what the public-employee unions are denouncing as an outrageous giveaway to the rich.

If anything, it’s too little and too late. One of the more ominous reports in recent months was that Rhode Island was bleeding population faster than any other state, except one.

That state, woeful Michigan, offers a sobering object lesson for those who wish to tax Rhode Island ever more. Last year, the Wolverine State tried to tax its way out of its troubles, as Democratic Gov. Jennifer Granholm forced through a hike in the state income tax from 3.9 percent to 4.35 percent, along with a 22-percent increase in the state’s tax on gross business receipts.

She argued that the tax hikes would produce $1.3 billion that could “invested” in new spending. What it produced, instead, was a $350 million to $550 million revenue shortfall, forcing the state to scramble to balance the budget, as The Wall Street Journal noted in a May 28 editorial (“Granholm’s tax warning”).

In a state already battered by the decline of the auto industry, the tax hike left Michigan with an unemployment rate of 6.9 percent, high above the national average of 5 percent. (Rhode Island’s rate is 6.1 percent.) Meanwhile, large numbers of those who can afford to flee are leaving, and the state’s housing prices are declining at the fourth-fastest rate in America. Locals call it “the Detroitification of Michigan.”

Furious taxpayers have gathered enough petition signatures to force a recall election on House Speaker Andy Dillon, one of the chief advocates of the tax hike.

That does not seem a very promising model for Rhode Island to copy.

What needs to be done is clear. The Ocean State must move toward a more competitive tax structure, especially with its neighboring states. It must reform government to recalibrate spending to what citizens can afford. To get there, it must better balance the interests of public-employee unions and taxpayers.

Given its other qualities of beauty and location, Rhode Island would enjoy tremendous prosperity if it did the right thing. It could then generate the revenues necessary to maintain its roads and bridges, care for its poor, provide excellent public education and perform other essential functions.

It would be comforting to subscribe to the childlike faith that taxing “the rich” would take care of everything. But, in the real world — as Michigan and Rhode Island have amply demonstrated — it does not work. People will invest their money in other states. They have access to these things called moving vans. They can pack up and leave.

Edward Achorn is The Journal’s deputy editorial-pages editor ( eachorn@projo.com).