Acknowledging he will likely “face accusations of engaging in class warfare,” Rhode Island Representative Scott Guthrie called on wealthy Ocean Staters to pay more in taxes this week to help close the state’s budget gap.
From the Representative’s press release:
“As the state budget deficit continues to loom large, for yet another year, one phrase continues to remain popular from elected officials – shared sacrifice,” said Representative Guthrie. “Well, I see municipalities sacrificing, as well as many of the residents of those communities. I see sacrifices from the poorest and neediest in Rhode Island, the results of continued trimming in the social services funding. What I don’t see is sacrifice from the wealthiest members of our society who could most easily afford to give a little more to help their many neighbors and fellow citizens who are suffering.
““Trickle down doesn’t work. We’ve tried it for years and all the benefits continue to trickle up. We need a shift back to a more fair tax policy.”
Representative Guthrie filed four different bills offering four different scenarios for raising revenue. Each of them would add a fourth, temporary bracket to the state’s personal income tax and introduce a different marginal rate on income above different thresholds. That is, the new one or two percent tax bracket would not apply to all income, only that income above either $250,000 or $500,000, depending on the proposal.
The Institute on Taxation and Economic Policy (ITEP) analyzed the representative’s proposals at the request of the Economic Progress Institute. The two bills that increase the top marginal rate for taxpayers with taxable income greater than $250,000 would impact less than 2 percent of taxpayers. The bills that increase the top marginal rate for taxpayers with taxable income greater than $500,000 would impact less than 1 percent of taxpayers.
Representative Guthrie says that his proposals could bring in anywhere between $37.9 and $144 million in revenues for the two year period they are in effect, depending on which is implemented, or $20 to $70 million per year. His plans are outlined here.