Bell: DaPonte doesn’t get RI progressives’ income tax critique

January 21st, 2013 at 10:10 am by under Nesi's Notes, On the Main Site

Senate Finance Committee Chairman Dan DaPonte caused a stir last week when he told me he was “quite honestly confused at the liberal opinion that the 2010 personal income tax reform was a big giveaway to high-income earners.” Samuel Bell, Rhode Island coordinator for the Progressive Democrats of America, e-mailed this response to the chairman’s comments:

There is a very simple reason Senator Dan DaPonte says he is “confused at the liberal opinion that the 2010 personal income tax reform was a big giveaway to high-income earners.” That is not the liberal opinion. DaPonte is confusing the 2010 reform with the 2006 tax cuts for the wealthy – the flat tax – which were indeed a big giveaway to the rich.

As a package of technocratic changes, the 2010 reform had a fairly minor effect on the overall income tax code. The details are dull and unimportant: instead of allowing the top rate to fall from 6% in 2010 to 5.5% in 2011, as it would have under the law at the time, the 2010 reform froze the top rate at 6%. (Technically, the rate fell by 0.01 points to 5.99%.) So relative to the proposed 5.5% flat tax rate for 2011, the 2010 reform actually raised income tax rates on the wealthy extremely mildly. On the other hand, relative to 2010 policy, the changes represented a minuscule decrease in effective nominal tax rates for the wealthy (due to the complexities of the marginal rate structure). In short, it was a bureaucratic reform of little significance. If progressives opposed the 2010 changes, it was because they did not address the deeply unfair 2006 tax cuts for the wealthy.

Few red states have slashed taxes for the rich as deeply as Rhode Island did in 2006. When state lawmakers dropped the top rate from 9.9% to 5.99%, the General Assembly claimed they were creating jobs. What followed was a clear demonstration of the failure of Republican economics. There is only one difference between what happened in Rhode Island and what the national Republican party would like to do to America: in Rhode Island, many of the Republicans have Ds after their names.

The economic devastation we are facing does not call for the laughably tiny tweaks Chafee and the General Assembly are proposing. What we need is a jobs bill, one we can easily fund by rolling back the 2006 giveaways to the rich. So let’s not waste our time discussing the bureaucratic baby steps Smith Hill loves. Let’s actually fix the economy.

• Related: DaPonte: RI progressives are wrong about income tax changes (Jan. 18)

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6 Responses to “Bell: DaPonte doesn’t get RI progressives’ income tax critique”

  1. [...] Bell: DaPonte doesn't get RI progressives' income tax critiqueWPRI-TV 12 (blog)Senate Finance Committee Chairman Dan DaPonte caused a stir last week when he told me he was “quite honestly confused at the liberal opinion that the 2010 personal income tax reform was a big giveaway to high-income earners.” Samuel Bell, Rhode … [...]

  2. chuck roscoe says:

    Regardless, RI still has one of the highest individual tax burdens in the country combine that with one of the worst business inviorments, one of the worst managed states, population decline the worst in he country and on an on……the debt per capita in RI is $24,000.00. For a family of four that is close to $100,000.00. with all this good stuff going on lets keep on voting for the same defunct people in so we can go down with CA NJ and CT. The only way out is bankrupsy. don’t let the liberal smoke screen cloud your vision.

  3. barry says:

    While RI has to consider being competetive with other states in attracting economic activity, the idea that “liberals” have run the state is ludicrous. Republican Governors have appointed all the people who actually run all the state agencies for the last 18 years (counting Chafee as R) and of course Gov Don was the originator of the Schilling fiasco. The state has cut back on support for public higher ed, state employee benefits, support for environmental protection, infrastructure investment and reduced taxes for the wesalthy, all to no avail. Some of our problems may be due to “free trade” policies that have exported our manufacturing jobs that once made RI rich. Perhaps our failures are due to NOT following “liberal” policies.

  4. [...] Related: Bell: DaPonte doesn’t get RI progressives’ income tax critique (Jan. 21) Tags: citizens for tax justice, economics, economy, institute on taxation and economic [...]

  5. [...] doesn’t necessarily contradict progressives’ argument that wealthier Rhode Islanders have gotten a tax cut: the studies show the share of income paid by [...]