If the facts aren't on your side, why not just buy yourself a favorable change in tax policy? Well, federal authorities are now investigating whether that sort of approach helped to get legislation to cut capital gains taxes passed in Rhode Island a few years ago. As the Providence Journal reports, former House Majority Leader Gerard Martineau recently plead guilty to two federal corruption charges for the business relationships he maintained with CVS and Blue Cross & Blue Shield while a member of the Assembly and "could still face charges for influencing capital-gains tax-cut legislation" at the request of the former company, the nation's largest retail pharmacy chain.
In 2002, despite scant evidence that tax breaks on capital gains promote economic growth, Rhode Island enacted legislation to gradually eliminate the taxation of capital gains held for five years or more. As the Rhode Island Poverty Institute notes, the Assembly froze the scheduled reduction this year, but in light of the state's continued fiscal problems and the sordid manner in which the initial legislation may have been adopted, restoring the tax should be at the top of the Assembly's agenda in 2008.