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Harold Burns: We need rich people here to pay for government

01:00 AM EDT on Monday, June 29, 2009

In his June 11 Commentary piece (“Rich owe millions more to R.I.”), state Rep. Scott Guthrie (D.-Coventry) argues that legislation to reduce the maximum state income tax rate by providing an alternate flat tax option has “allowed the richest Rhode Islanders to avoid paying their fair share.” It’s the “fair share” that really got me!

Mr. Guthrie wrote that the average income of those who are receiving this benefit was $462,000. Based upon 2008 tax rates for a couple filing jointly, a 7-percent rate would make their Rhode Island income tax about $25,000. This couple would also pay federal income taxes of about $100,000, and very likely Rhode Island municipal property taxes of around $10,000, an automobile tax of about $2,000, and sales tax on their purchases, perhaps another $3,000. The total tax bill for this couple is at least $140,000. Seems like more than their “fair share.” In fact 70 percent of the income taxes in the United States are paid by the top 10 percent of earners.

When are we Rhode Islanders going to realize that if we chase people away from Rhode Island with high taxes that we’ll not have enough money to pay teachers, police, firefighters and other government workers? Why have so many retirees left the state for lower or no-income-tax states? They move away because our state is not competitive.

The current debate in Rhode Island is about how labor, business and government can maintain their status quo. The debate must shift. Our public- and private-sector unions need to show how they can help Rhode Island be attractive for businesses to create new jobs. Our government officials (state legislators, municipal leaders) need to find ways to be much more efficient. A great start would be to consolidate our three dozen city and town government services and school districts into something much more efficient.

Efficiency in government — that’s what Mr. Guthrie and all our state representatives should be working on in these tough times. Taxing a shrinking base of higher-income earners is a “going-out-of-business” strategy for Rhode Island.

I challenge Mr. Guthrie and all state and municipal leaders and representatives to throw away their sacred cows and bring about meaningful structural efficiencies. It will take courageous leadership. And I challenge union leaders to demonstrate through their actions how they are helping current and future businesses grow and attract new jobs, rather than a consistent focus on entitlement and unwelcome publicity for Rhode Island.

HAROLD BURNS

Riverside

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