Flat Tax Fight: Test of Power for the Liberals?

Liberal legislators are pushing to eliminate the state's flat tax, which benefits Rhode Island's wealthiest residents, and to funnel the enhanced tax revenue to cities and towns. Municipalities, after all, are slated to lose some $55 million in state funding under the 2009-2010 budget plan now before legislators. 

Just months after an emerging progressive bloc flexed its muscle in a mid-year budget fight, it is tempting to see the flat tax push as a test of the group's newfound political strength. And if the liberals triumph this afternoon, as the legislature debates plans to kill the flat tax or at least freeze the flat tax rate in place, one could only conclude that they have, indeed, arrived.

But defeat will not necessarily be cause for an obituary. As State Rep. Arthur Handy, D-Cranston, points out in an interview with N4N, progressives can already claim some victories in this budget - most prominently, a reversal on a capital gains tax break that also benefits the well-to-do. "It's not just one bill that's going to be a lithmus test for us," he said.

Indeed, it will be interesting to see if rank-and-file members, beyond the most committed lefties, will be willing to cross legislative leaders on the flat tax and risk their other legislative priorities down the line. For most progressives, after all, this budget is not half-bad, all things considered.