Providence has topped a set of national rankings, and Mayor Angel Taveras probably isn’t happy about it.

Taxpayers in Rhode Island’s capital city paid the highest commercial property taxes charged in any of the nation’s 53 biggest cities in 2011, according to the latest edition of a widely cited comparative study by the Lincoln Institute of Land Policy and the Minnesota Taxpayers Association.

The previous edition of the study listed Providence as having the second-highest commercial property taxes among big cities, behind only Detroit – a statistic that’s been widely referenced locally ever since Governor Chafee cited it on Newsmakers and then had his research confirmed by PolitiFact.

But the tax burden on commercial property in Providence grew even heavier in 2011, when Rhode Island’s cash-strapped capital slapped a tax bill of $4,975 on commercial property worth $100,000 – $69 more than second-ranked Des Moines and $75 more than third-ranked Detroit. Here’s a chart:

Taveras has proposed freezing the commercial tax rate for seven years – apparently at what has been the highest level in any major U.S. city, according to this study. Even that may not happen: City Council members have expressed skepticism about the proposal, suggesting they may raise commercial taxes even more.

The study said Providence also charged the fifth-most on apartment buildings among the 53 big cities in 2011, with a tax of $21,765 on a $600,000 property, behind Des Moines, Detroit, New York City and Buffalo. In addition, Providence ranked 11th-highest for homestead property taxes on the median-value home and 9th- and 10th-highest for industrial property taxes on machinery, equipment, inventories and fixtures.

The latest edition of the study was cited Friday on Twitter by Gary Sasse. “Rhode Island’s economic health is linked to more competitive business taxes in the Capital City,” he commented (in abbreviated tweet form). Not coincidentally, the owner of the now-vacant Superman building wants a tax break to redevelop it.

By Dan McGowan

PROVIDENCE, R.I. (WPRI) – The average Providence resident would see his or her property taxes increase by 6% and the city would eliminate its structural deficit by asking the state to boost municipal aid under a budget proposal introduced Thursday by Mayor Angel Taveras.

Read the rest of this story »

By Dan McGowan

PROVIDENCE, R.I. (WPRI) – Providence Mayor Angel Taveras on Monday said he still plans to include a seven-year commercial tax freeze in his 2013-14 budget proposal despite a 13.2% citywide decrease in residential property values that has some city council members concerned a tax increase for homeowners is on the horizon.

Read the rest of this story »

Treasurer Gina Raimondo has a message for members of Congress: don’t tax municipal bonds.

Raimondo and 41 of her fellow state treasurers sent a letter [pdf] last week to the top Republican and Democrat on the U.S. House Ways and Means Committee, emphasizing “the importance of maintaining the current tax exemption for municipal bond interest” as they consider plans to overhaul the U.S. tax code.

The letter was organized by the National Association of State Treasurers, which describes itself as “a bipartisan organization of state treasurers and other finance officials with similar duties.” The group said tax-free municipal bonds save states and municipalities an average of 25% to 30% on interest costs.

“The tax-exempt bond market has worked effectively for over a century,” Virginia State Treasurer Manju Ganeriwala, the association’s president, said in a statement. “Let’s not dismantle something that works.”

Raimondo, a Democrat, is considering a run for governor in 2014. Here’s her signature on the letter:

U.S. Sen. Jack Reed doesn’t just debate taxes. He pays them, too.

Reed and his wife, Julia Hart Reed, paid $39,326 in federal income taxes and $12,565 in state income taxes on their 2012 adjusted gross income of $249,700, Reed spokesman Chip Unruh told WPRI.com on Monday.

Reed earned a gross salary of $174,000 as a U.S. senator, while Mrs. Reed earned $110,305 working for the Secretary of the State as an Interparliamentary Services Coordinator. Federal taxes are due Monday.

The Reeds filed a joint income tax return, paying 15.8% to the federal government and 5% to the state government. They took $61,150 in itemized deductions on their federal return and reported $3,000 in capital losses. The pair’s federal tax rate was calculated using the alternative minimum tax, or AMT.

The Reeds’ tax bill was cut $27,503 by the home mortgage interest deduction and $5,660 by charitable contributions. Uhruh said they deducted an additional $4,947 for miscellaneous items including non-reimbursed Washington living expenses for members of Congress; professional dues and expenses including the Rhode Island and D.C. bar associations and the Council on Foreign Relations; tax preparation fees; and investment advisory fees.

U.S. Sens. Jack Reed and Sheldon Whitehouse were among the 79 senators who voted Thursday night to get rid of a tax on sales of medical devices passed in 2010 to help fund President Obama’s health reform law.

The two Rhode Island senators joined 31 of their fellow Democrats and all 45 Republicans in voting to repeal the 2.3% excise tax on medical devices, which took effect Jan. 1. Getting rid of it would cost the federal government $29 billion from 2013 to 2022, according to the Center on Budget and Policy Priorities, a left-leaning Washington think-tank that opposed repealing it.

Whitehouse and another stalwart liberal, Massachusetts Sen. Elizabeth Warren, were among those who sided with the device industry on the repeal measure, which was introduced by Republican Orrin Hatch of Utah and has been the subject of a heavy lobbying effort.

Stephen Lane, chairman and chief venture officer of the Providence-based medical-device firm Ximedica, said at a manufacturing forum last year co-hosted by Congressmen David Cicilline and Jim Langevin that the tax was causing his industry to move production to Asia. Cicilline and Langevin voted to keep the tax, and Cicilline clashed over the question with his Republican opponent Brendan Doherty in a WPRI 12 debate last fall.

By Ted Nesi

PROVIDENCE, R.I. (WPRI) – A coalition of political progressives and labor leaders renewed their uphill battle to raise affluent Rhode Islanders’ taxes on Tuesday – but they ran into immediate opposition from Senate President M. Teresa Paiva Weed.

Read the rest of this story »

The House Fiscal Office crunched the numbers on how much state aid Governor Chafee wants to give the cities and towns in his proposed 2013-14 budget: $80.3 million, up from a proposed $71.4 million this year (excluding K-12). That’s a healthy bump, but it’s still way less than municipalities were getting in 2006-07:

In theory the cities and towns could have made up for all the money they lost when the General Assembly axed the car tax reimbursement by immediately hiking drivers’ tax bills, but in practice that probably would have caused a mass revolt, so this was where the rubber met the road when a huge economic downturn collided with a requirement that governments balance their budgets.

In nominal dollars, House Fiscal says lawmakers hiked non-school aid to municipalities from $35 million in 1989-90 to $106 million in 1999-2000 and $202 million in 2004-05, then slashed it to $60 million in 2010-11. What the General Assembly giveth, the General Assembly taketh away.

​Update​: State aid to school districts, on the other hand, has climbed steadily over the past two decades except for a dip during 2008-09 and 2009-10 (with the much-discussed new funding formula taking effect in 2011-12):

It looks like U.S. Sen. Sheldon Whitehouse will get another chance to pass his “Buffett Rule.”

A growing number of reports from Washington indicate top Senate Democrats will make a version of the Buffett Rule – which would set a minimum tax rate for millionaires – a key part of their proposal to avert the so-called “sequester” of mandatory spending cuts set to take effect next month.

The Buffett Rule started out as an idea in an op-ed by Warren Buffett. After President Obama mentioned it in last year’s State of the Union address, Whitehouse quickly introduced legislation to put the measure into law. Whitehouse’s bill died in April when it failed to overcome a filibuster.

To pass the measure under normal Senate filibuster rules, Democrats would need every senator in their 55-member caucus to vote in favor and then win over five Republicans. That seems unlikely. But the idea’s continued prominence is another sign that Whitehouse has a feel for the legislative zeitgeist.

As for the fiscal impact, the CBO said Whitehouse’s “Buffett Rule” bill would raise $47 billion over 10 years. Whitehouse himself included the Buffett Rule in his new plan [pdf] to offset the sequester without spending cuts earlier this week, though he acknowledged the whole proposal was dead on arrival.

• Related: Not one, not two, but 18 views on Whitehouse’s ‘Buffett rule’ (April 16)

Rhode Island’s Future editor Bob Plain highlighted a new San Francisco Fed paper that argues “the decline in state-level employment is strongly correlated with the increase in the percentage of businesses complaining about lack of demand,” and “there is no evidence that job losses were larger in states where businesses were more worried about these factors” – important points about the relationship between taxes and job growth.

However, the paper includes a specific data point about Rhode Island that’s also worth highlighting. The number of Rhode Island businesses citing regulation and taxes as their top concern jumped by more than 30% between 2008 and 2011, significantly more than in any other state:

The Fed paper’s main conclusion – that state-level employment dropped during the recession mainly due to a lack of demand, not a new fear of taxes and regulations – is an important finding for the debate nationwide. But what the survey data shows – that Rhode Island’s business owners have grown more concerned about taxes and regulations than their counterparts anywhere else – is an important finding, as well.

It’s vital – and too rare – that outside research gets brought to bear on the policy debate in Rhode Island. But it’s just as important that Rhode Islanders try to figure out why their state’s economy keeps lagging behind those of neighboring states, not to mention the nation’s.

• Related: Josh Barro on why RI’s economic problems are so intractable (May 4)

Rhode Islanders pay the 13th-highest state and local taxes in the country compared with their incomes, according to the latest analysis of Census data by the Massachusetts Budget and Policy Center.

The $6.9 billion in state and local taxes paid by Rhode Islanders in 2009-10 totaled 11.1% of their personal income, up slightly from 11.0% the prior year, the analysis shows. Just 12 other states took more of their residents’ income in state and local taxes, according to the group.

The national average was 10.6% of income, and Massachusetts ranked 25th at 10.2% of income, the analysis shows. Three other New England states – Maine, Vermont and Connecticut – took more of their residents’ incomes in taxes than Rhode Island did, while New Hampshire took the least.

The left-leaning Massachusetts think tank said it looks at taxes as a share of personal income rather than per capita because it “allows for a meaningful comparison among states.” Another group, the right-leaning Tax Foundation, ranks Rhode Island’s tax burden higher after making adjustments to the data.

• Related: Charts: Regressive RI taxes getting (slightly) more progressive (Jan. 30)

(chart: Massachusetts Budget and Policy Center modified by WPRI.com)

For more than a decade, state and local taxes in Rhode Island have been among the nation’s most regressive – meaning they’re structured to take a larger share of income from the poor than they do from the wealthy.

That said, a WPRI.com analysis of the last decade’s “Who Pays?” studies from the Institute on Taxation and Economic Policy shows the richest Rhode Islanders are paying slightly more of their incomes in state and local taxes than they were in 2002, while the poorest are paying a bit less.

That doesn’t necessarily contradict progressives’ argument that wealthier Rhode Islanders have gotten a tax cut: the studies show the share of income paid by the top 1% in income taxes fell from 5.8% in 2002 to 4.8% in 2013. But that reduction was offset by an increase in how much the top 1% paid in property taxes, which rose from 2% to 3.1%. Here’s how the tax mix for the top 1% has changed over the last decade:

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The Institute on Taxation and Economic Policy is out with its latest look at how much of their incomes different Rhode Islanders pay in state and local taxes, and the big headline hasn’t changed: the state’s tax structure takes almost twice as much from the poorest 20% of residents as it does from the top 1%.

Rhode Island families making less than $18,000 a year will pay 12.1% of their 2010 income in state and local taxes under current law, according to the study by ITEP, a Washington-based research group that is affiliated with the labor-backed nonprofit Citizens for Tax Justice.

At the other end of the spectrum, Rhode Island families making $378,000 or more a year will pay 6.4% of their 2010 income in state and local taxes when the federal deduction for those taxes is taken into account. An analysis by WPRI.com of ITEP’s reports shows that since 2002, state and local taxes have gone up or stayed steady for the top 60% of taxpayers while decreasing slightly for the bottom 40%:

(The 2010 income for the lowest 20% was less than $16,000; for second 20%, $16,000-$27,000; for middle 20%, $27,000-$42,000; for fourth 20%, $42,000-$72,000; for the next 15%, $72,000-$141,000; for the next 4%, $141,000-$328,000; and for the top 1%, $328,000 or more.)

Rhode Island is among 10 states that levy the highest taxes on the poor and is the only New England state in that group, according to the study. It is also one of only three states in the U.S. where the Earned Income Tax Credit isn’t fully refundable, which means Rhode Island families with no income tax liability cannot receive the benefit of the credit, the study says.

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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)

Senate Finance Committee Chairman Dan DaPonte has had it with liberal critics of the income tax law he helped shepherd through the General Assembly in 2010.

DaPonte, D-East Providence, and his colleagues are under renewed pressure this legislative session from Rhode Islanders for Tax Equity, a coalition of progressive activists and unions leaders who want taxes hiked on upper-income residents. This year’s top rate is 5.99% on income above $133,250.

DaPonte, the Senate’s top budget-writer and a key lieutenant to Senate President M. Teresa Paiva Weed, told me on Wednesday he doesn’t want to revisit the issue:

I think the 2010 changes that are in place are appropriate. I think when you look at the increased revenues that we’ve gotten – I’m anxiously awaiting the revenue report that’s published in March, to show which income brackets paid what taxes.

I’m still quite honestly confused at the liberal opinion that the 2010 personal income tax reform was a big giveaway to high-income earners. From everyone that I’ve heard from, particularly tax professionals who do this stuff for a living – they have a completely opposing opinion, that that is not, in fact, what we did do.

That was testified to during the process. There are going to be winners and losers, but we needed a simpler, fairer tax formula, and that’s what we have now.

• Related: Paiva Weed stays vague on whether she’d OK income tax hike (Jan. 16)

​By Dan McGowan and Ted Nesi

PROVIDENCE, R.I. (WPRI) – The reaction to Gov. Lincoln Chafee’s budget proposal Wednesday night was very different from the response to his first two. Here’s a roundup of reactions from Fox, Paiva Weed, Raimondo, Taveras, Fung, Melo, DaPonte, Newberry and Tanzi.

Read the rest of this story »

• Related: Chafee seeks lower corporate tax rate, more school funding (Jan. 16)

• Overview: No tax hikes in Chafee budget

In March 2011, a newly inaugurated Gov. Lincoln Chafee proposed an ambitious restructuring of Rhode Island’s sales tax to boost revenue. House Speaker Gordon Fox killed the idea just a month later amid a huge outcry.

Last year Chafee tried a different tack, proposing an increase in the meals tax and trying to win support by earmarking the money for education. But the dining industry protested, putting signs on restaurant tables from Woonsocket to Westerly, and lawmakers ignored the governor’s big idea on revenue once again.

Chafee may be stubborn, but he’s not insane: his first two budgets taught him that proposing high-profile tax hikes is political suicide. So the message in Chafee’s proposed 2013-14 budget is unequivocal: read my lips, no new taxes.

“Governor Chafee’s revenue plan was very simple – taxpayers have already shouldered enough of the cost of government, and the delicate recovery we are in today should not be derailed by any tax increases,” the budget document declares. “Therefore, Governor Chafee’s FY 2014 Proposed Budget ​does not​ include ​any​ increases in taxes, fees or charges.” (They underlined it in the original.)

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Here’s what Senate President M. Teresa Paiva Weed told The Providence Journal on Dec. 31 when asked about raising income tax rates in Rhode Island: “I would keep an open mind to a tax increase on the highest-wage earners.”

Yet here’s what the Senate president’s newly released report about economic policy suggests on the issue: “The General Assembly could continue to resist increases in broad-based taxes and maintain 2010 personal income tax reforms.”

So does Paiva Weed agree that the income tax rates enacted in 2010 should stay in place? Or is she still open to the idea of raising them? I put the question to her at Tuesday’s press conference, and here’s her entire response:

One of the hardest decisions we make here – I am committed to what the report says. I do not think – and I’ve always been committed – that we should have any change in our tax structure. The Senate was a leader.

But what I have always said is when you look at the budget document, obviously it’s always a choice between vital services and revenue. And I’m always hesitant to say you have a closed mind on anything, because if you don’t look at the budget document in its entirety then you’re making blind choices – on any issue. If you say I support a cut here, I support an increase here – the budget document is perhaps our most significant policy document.

So whenever anybody, quite honestly, asks me any specific question about the revenue side or cut side – I think the finance chairs are always being asked about the cut side, and their famous answer is, ‘Everything is on the table’ – and I think that when asked about the revenue said, we always all say we have to keep an open mind on everything.

Because at the end of the day, as legislators, we recognize that it is a broad picture – it’s a painting – it’s not just one specific event.

There’s two ways to read that statement. On the one hand, she starts off by saying, “I do not think … we should have any change in our tax structure.” Later, though, she says legislators “always all say we have to keep an open mind on everything.” It’s unclear if that means she just ​says​ she has an open mind about tax increases, or if that means she has an open mind despite being resistant to tax increases.

• Related: Paiva Weed offers her take on turning around the RI economy (Jan. 15)

​(photo: Ted Nesi/WPRI)

You pay it every time you go to the pump – but how much do you really know about the gasoline tax in Rhode Island, Massachusetts and Connecticut? Find out how much the tax actually costs and where the revenue ends up.

Matt Yglesias writes for Slate (emphasis added):

There are certainly poor people here in Washington, struggling families in New Jersey, difficult sections of Philadelphia, and even in glitzy New York, many people having a hard time getting by in public housing. But on the whole this is a very prosperous section of the country, and when you combine its wealth and its size, it’s one of the most economically successful regions in the world.

Click over to ye olde Brookings State of Metropolitan American map and you’ll see that Davidson’s journey started in the New York metropolitan statistical area, which has the 13th highest median income out of America’s 100 largest MSAs. …

The Northeast’s laggard area is the Providence, R.I./New Bedford, Mass./Fall River, Mass., MSA that’s only 43rd in median household income with a number that’s only slightly above the national median. The Northeast corridor is so rich and successful, in other words, that Providence’s averageness looks like failure. …

Which is hardly to say that the Northeast is perfect. But I think dwelling on its pockets of industrial decline misses the biggest story here. The real questions to ask are about the linked issues of why the cost of living is so high and the population growth so relatively low in this economically dynamic region.

In the wake of their smashing election victory on Tuesday, Rhode Island liberals may want to ponder Yglesias’s observation and a related point from Michael Mandel: “Progressives cannot achieve their social goals without faster growth.” For more, read David Leonhardt on why growth matters.

• Related: RI ‘used to be about as rich as Mass.,’ then ‘stagnated terribly’ (Sept. 5)

Slate’s Matt Yglesias serves up some real talk about Rhode Island (emphasis mine):

The real truth, as noted in this great Andrew Gelman post from five years ago, is that there isn’t that much change over time in states’ economic well-being. All things considered the best predictor of how rich a state was in 2000 was simply how rich it was in 1929. There are some exceptions to this. … Rhode Island used to be about as rich as Massachusetts and has stagnated terribly. …

[T]he truth is that it’s very difficult to alter to the long-term trajectory of a state’s economic fortune. That’s primarily because people can move. If Mississippi starts doing a much better job of preparing its students to succeed in higher education, a lot of those people will probably leave and move to higher-income states like Connecticut or Massachusetts. Indeed, neither [Deval] Patrick nor Romney was born in Massachusetts. Rather, like many of the state’s most successful individuals they moved to the Bay State from elsewhere to go to Harvard and then stuck around. But creating Harvard was a smart public policy initiative undertaken in the seventeenth century and not something anyone alive today can take credit for.

Right.

This is something too often missed in all the debates over Rhode Island’s economy - after starting at parity after World War II, the state has spent six decades losing ground economically to its neighbors, particularly during the 1980s and 1990s. That’s a major problem for a variety of reasons, many of which were noted by Josh Barro in his must-read post from May.

Yglesias also indirectly references this 2005 Steve Sailer post tabulating “the monetary standard of living by state, as calculated by median income for a family of four divided by the Accra’s cost of living index.” Sailer gives Minnesota the highest standard of living, “at least in terms of things money can buy (i.e., not weather).”

As for Rhode Island? It was way down the list at #40, far behind Connecticut (#15), Massachusetts (#20) and Vermont (#33). (The other two New England states weren’t ranked due to lack of data.)

Woonsocket’s financial turmoil has led to much discussion about the example of Central Falls, which first entered receivership in May 2010 and filed for bankruptcy in August 2011. One lesson from the tiny city – there’s probably no way Woonsocket residents avoid a big increase in their tax bills over the coming years.

This chart shows total property taxes levied in Central Falls from 2008-09 through 2015-16, the last year projected in its court-ordered restructuring plan. Taxes will jump nearly 35% citywide before inflation:

Taxes are already high in Woonsocket when compared with other cities, though.

Another chart included in Central Falls’ bankruptcy filing shows effective tax rates for six distressed communities in 2010-11, adjusted for income; Woonsocket is the most-taxed by that measurement:

The big day is here. The Rhode Island House of Representatives will take up the finance committee’s $8.1 billion tax-and-spending plan for 2012-13 this afternoon, with the debate scheduled to start at 2 p.m. – a likely story – and expected to continue for hours.

Most of the buzz is about whether Speaker Fox will be able to beat back attempts to add a tax hike on upper-income Rhode Islanders to the budget proposal. Legislative leaders and Governor Chafee have made clear all along they won’t support that, but many rank-and-file Democrats are queasy about voting against a populist measure with strong labor backing.

I’ll have live coverage of the budget debate on my Twitter feed (@tednesi) this afternoon and evening, and I’ll post a full article wrapping up what lawmakers do after the day’s events are done. And, of course, we’ll have live coverage on WPRI 12 at 5 p.m., 6 p.m. and 11 p.m., as well as on Fox Providence at 10 p.m.

If you really want to wonk out, dive into the budget analysis briefings written up by the House Fiscal Office [pdf] and the Senate Fiscal Office [pdf]. This chart from the Senate staff, for example, shows Democratic lawmakers are leaving yawning future deficits:

Update: Well, it was a nice idea anyway. I’ve been pulled off budget coverage to tackle all today’s 38 Studios developments, so no budget coverage from this corner tonight.

• Related: Budget on autopilot gives Rhode Island permanent deficits (June 13)

(photo: Ted Nesi/WPRI)

This is interesting, and perhaps surprising: The Tax Foundation reports Rhode Island posted the 18th-fastest growth in high-income taxpayers between 1999 and 2009.

While the total number of Rhode Island taxpayers grew by just 4% during that period, the number with adjusted gross incomes above $200,000 jumped 63%, for a net gain of 58.9% at the top end, the biggest in New England. Nationally, the growth rates ranged from 137% in North Dakota to 18% in last-place Michigan.

“The $200,000 threshold is in nominal dollars, so all states will have had considerable growth, but the differences between the states demonstrate that certain states have had much stronger increases in wealthy taxpayers than others,” The Tax Foundation’s Nick Kasprak writes. Take a look:

Brendan Doherty isn’t interested in signing conservative lobbyist Grover Norquist’s famous anti-tax pledge, which has long been a rite of passage for most major Republican politicians.

“Brendan has not signed the ATR pledge and has no plans to sign it,” Doherty spokesman Robert Coupe told WPRI.com, using the acronym for Norquist’s group, Americans for Tax Reform.

Norquist – who once said he wants to “shrink [government] down to the size where we can drown it in a bathtub” – created the Taxpayer Protection Pledge in 1986 with the backing of President Reagan. “Signing it has become de riguer for GOP candidates running for federal or statewide offices,” The Hill later wrote.

Doherty now joins a growing group of Republicans who say they don’t want to be tied down by a pledge to never vote for an increase in federal revenue. At least a third of the GOP’s top candidates this year aren’t planning to sign the pledge, The Washington Post reported last week.

“The premise behind this and similar pledges that seek to tie the hands of candidates and elected officials tends to result in greater division and increased gridlock in Congress, at a time when we need to seek consensus and common-sense solutions,” Coupe said.

“Brendan has called repeatedly for comprehensive tax reform to simplify the tax code, close loopholes and create a tax plan that treats middle class families fairly and allows small businesses to compete and create jobs,” he continued. “That is Brendan’s commitment to the citizens of Rhode Island and his pledge is to provide the real leadership that is needed in Congress right now.”

(photo: Wikipedia)

One of the biggest problems in Rhode Island policymaking, I think, is a lack of perspective – the state’s problems are looked at narrowly and locally, without paying nearly enough attention to national and global factors.

Forbes’ Josh Barro, one of the smartest analysts in the country today and a Nesi’s Notes favorite, isn’t stymied by that, since he lives in New York City. But he’s been keeping a close eye on Rhode Island over the past year and a half, and he’s got some important insights to offer us:

Within New England, Rhode Island faces a major structural disadvantage. Rhode Island’s per capita income in 2010 was $27,700. That’s actually slightly above the national average, but it’s far below Massachusetts ($33,200) and Connecticut ($35,100).

As a result, Rhode Island has both higher taxes and lower public expenditure than its neighbors. As of 2009, Rhode Island collected 10.1 percent of state GDP in taxes, outstripping Connecticut (9.9 percent) by a little and Massachusetts (8.9 percent) by a lot. But despite that, Rhode Island governments had only $4,638 in per capita tax revenue to work with, less than Massachusetts ($5,014) or Connecticut ($6,434).

In other words, any given Rhode Island taxpayer can expect tax savings by moving to Connecticut or Massachusetts, where he or she can also expect more generous government services. As such, it’s really hard for Rhode Island to stay competitive. Trying to match its neighbors on service delivery will mean having an outsized tax burden, and trying to match their tax rates means providing a lot less government.

(That may explain why Rhode Islanders feel overtaxed and think government services are inadequate.)

The whole article is a must-read for Rhode Islanders (and not just because I may have goaded Josh into writing it on Twitter). Fair warning – his conclusion will be a little depressing for locals. But if he’s right, we ought to start having a much more difficult, more nuanced conversation around here.

Read all about it - a productive 24 hours for the mayor, with a balanced budget now suddenly within reach.

Today is every American’s favorite holiday – Tax Day. It’s usually April 15, but that was Sunday, and it can’t be April 16 because that’s a holiday in Washington, D.C. (Emancipation Day). So April 17 it is.

Like many people, I like getting a tax refund every year. Unfortunately, that means I’m always subject to abuse from holier-than-thou amateur economists. “You just gave an interest-free loan to the government!” they scoff. “It was your money the whole time. You’re a fool!”

Well, sure. But there are reasons lots of Americans don’t follow that advice, the WSJ’s David Wessel explains:

Last year, the Internal Revenue Service refunded $300 billion, or 25 cents for every $1 it collected. More than 80% of the 143 million returns filed resulted in a refund.

Paying more in taxes during the year than one actually owes amounts to an interest-free loan to the government. Economists used to consider it irrational: The smart thing to do is reduce withholding to come close to matching one’s tax obligation.

But new evidence — and insights from behavioral economists — challenge that view and suggest that many people, particularly lower-income Americans, use the tax system to force themselves to save. Now, the government is looking for ways to take advantage of what Mark Iwry, the Treasury point man on saving and retirement issues, calls “savable moments.”

“People want to have a ready way to save,” says Michael Barr, a University of Michigan law professor and a former Obama and Clinton Treasury official. “For some families, tax time is a good time to do so.”

During World War II, when tax withholding was reintroduced, the Roosevelt administration paid Disney to make a propaganda cartoon with Donald Duck exhorting people to pay their taxes on time or else risk giving aid and comfort to the Nazis. Would a “Family Guy” cartoon have the same effect today? You decide:

Want to check the status of your refund? The IRS will update you here and Rhode Island will update you here.

The United States Senate will hold a vote this evening on whether to proceed with a debate on U.S. Sen. Sheldon Whitehouse’s “Buffett rule” bill, which would create a new minimum 30% tax rate for income over $1 million. (Here’s supporter Ezra Klein explaining it.) Regardless of the outcome tonight – Democrats need 60 votes to cut off a GOP filibuster – it’s safe to say this has become the most attention-getting initiative of Whitehouse’s first term.

Whitehouse appeared on Newsmakers earlier this month to make his case for the Buffett rule and defend it against critics. But he’s just one of many voices taking part in the heated national debate his bill has sparked. Here’s a sample of views on the Buffett rule from all over the map.

• Ezra Klein: ”Any deficit-reduction package is made up of lots and lots of smaller policies that contribute to the bottom-line figure. … When you add up the policies the two parties actually have in their budgets, Obama’s proposals reduce the deficit by more than Ryan and Romney’s. And that’s because he’s specified a bunch of tax increases that, together, add up to substantial deficit reduction. The Buffett Rule is the best known of these ideas, but it’s not the only one. On the Republican side, meanwhile, the crucial changes to the tax code have been left unnamed. Without them, the proposals lead to substantial deficit deterioration. Is that really on the same continent as serious?”

• Josh Barro: ”Tax reform is supposed to be about making the tax code simpler, less distorting, and less arbitrary. Yet, as I’ve written before, the Buffett Rule moves in the wrong direction on all of those measures. … Abolishing the step up in basis is exactly the sort of item that would show up on a real tax reform plan – it’s a reform that locates income that currently is improperly excluded from tax, and then taxes it. It would not introduce new distortions into the tax code, in fact, it would reduce them, by eliminating a tax incentive for people to hold assets they would otherwise trade. But then, that would be a serious policy idea, and the White House is mostly interested in the Buffett Rule as a political gimmick.”

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