Legislators Saved Powerball Winners $10 Million in Taxes

As I sit down to do my 2011 Rhode Island taxes, I am struck by the fact that I am paying more than I used to to the State of Rhode Island and more than I should.

I really hate deception in laws. You know, the writing of a law one way when it really means the opposite so the politicians can take credit as if they did something good but really they did something bad.

In 2010 the General Assembly passed a "tax cut" which raised my taxes and most
of the people in Barrington's taxes. It also increased the state deficit. In
what they claimed would be revenue neutral, the assembly lowered the tax rate
for high earners from 9.9% to 5.99%. It sure as shoot sounded good. What is better than saving 40% on taxes?

They would pay for it by "Broadening the Base" and eliminating "deductions." This also sounds good. But, in fact, it will save money for the rich people but it will cost the middle class families making $50,000 to $150,000, who own houses, with mortgages and pay high property taxes per house, not a high rate, a lot more.

As I pointed out in the election of 2010, that means many Barrington residents will pay more this year. Our state representative, Joy Hearn, lauded the law she voted for as a great boon she had brought to the town!

I am still really offended by that. If my taxes are going up, call it a tax increase. Don't think I am so stupid to believe you think it was a tax cut. Well, maybe she didn't know how it affected her constituents. I don't know. She should have.

But a lot of people I know are paying more Rhode Island taxes this year. And the rate change ended up not being revenue neutral, it still cost the state revenue. But it saved the wealthiest residents a lot of money. I congratulate them on their good fortune at my expense.

It was done out of fear that the rich would flee to a lower tax rate state, and if we lower the rate, people would come here. I have seen no hard credible evidence of
either. Just anecdotal.

This is like the oft-debated Bush tax cuts on the wealthy. Great for the wealthy, bad for the budget deficit. It is contributing to our state's deficit, though we have
other bigger factors that are the problem. 

What is amazing is that it is such a Republican idea! However in the world did it get past our partisan Democratic assembly? Perhaps they are richer than I thought.

But the two Powerball winners should throw a big party for the General Assembly! Maybe buy the leadership new Cadillacs. Between them, they will pay $10 million less in RI taxes because of the reduced rate.

I am sure they appreciate it! And I do wish them happiness in their good fortune, I truly do, and I wish it was my family that won.

But for the rest of us, when you are paying that extra 20 cents on a pizza, or when all the disabled services are cut, or towns go bankrupt from lack of school aid, or when you are middle class and find you are paying more state taxes, remember well that our Assembly members succeeded in saving Powerball winners $10,000,000! I will!