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When in doubt, blame the victim

This Just In

The rest of the story on Rhode Island’s tax ranking

Try this headline on for size:
 
R.I. TAXES, FEES LESS THAN MOST STATES.
 
That’s a real shocker, because Republican Governor Donald L. Carcieri and the Democratic leaders of the General Assembly have been telling a different story: Rhode Island taxes are sky high compared to those in other states.
 
It goes like this: Shame on Rhode Island — such a Lilliputian state, such Olympian taxes. Recently, there was a fresh round of Rhode Island-as-tax-hell stories, typified by this Providence Journal headline:
 
R.I. TAXES RISING, NOW SEVENTH IN COUNTRY
 
But here’s the rub:
 
Both the positive headline at the beginning of this article, and the dourer one in the Journal, are based on the same report, released recently by the Rhode Island Public Expenditure Council, the business-sponsored government reform group.
 
The difference is what parts of the report the headlines emphasize.
 
For example, RIPEC’s Table Two measures “all state and local tax collections per $1000 of personal income.” And, in fact, that table ranks Rhode Island seventh-highest of all states in 2005.
 
A different table uses another comparison, again totaling state income and sales taxes and local property taxes, but expressing them as a ratio of the state’s population. On a per-capita basis, Rhode Island is No. 9, still in the Top 10.
 
But if you can stay awake long enough, you’ll reach RIPEC’s Table 10, which measures the Big Three taxes, as well as other money that governments collect from citizens, like car registrations and beach fees.
 
In these terms, Rhode Island is 26th from the top, as a ratio of personal income. (Massachusetts is 43rd and Connecticut 46th). When this broader cost is expressed as a per-capita ratio, Rhode Island goes to No. 13. (But Connecticut vaults to No. 4 and Massachusetts to No. 7.)
 
These later tables suggest a couple of possibilities. One is that other states are socking their citizens with charges they aren’t calling “taxes,” but that still dig into taxpayers’ pockets, and that the total cost of Rhode Island government is not as oppressive as critics suggest. Including non-taxes like car license fees certainly makes sense, because fees are harder on lower incomes than rich ones.
 
This exercise is serious now, because Rhode Island finds itself in a budget crunch. The state has been reducing taxes, while spending has been going up, and the budget is unstable. As a result, Carcieri and the General Assembly have cut programs, especially ones that help children and the poor, arguing that taxes are too high and can’t be raised.
 
But whether taxes really are so awful that drastic steps are warranted — like throwing all 17-year-old offenders into the Adult Correctional Institutions or taking heating aid away from poor families in the winter — is a complicated question.
 
What the RIPEC report shows is that the tax debate may be too one-sided and oversimplified. So that a headline like . . .
 
WARNING: OCEAN STATE DROWNING IN TAXES

. . . is just as unfair as one that goes like this:
 
JUMP INTO THE OCEAN STATE: OUR TAXES ARE JUST FINE

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