Disagreement over Corporate Tax Rate Modifications
The business community is applauding a proposed cut in Rhode Island’s corporate tax rate.
In his latest budget, Governor Lincoln Chafee calls for cutting the corporate tax from 9 to 7 percent over three years.
Greater Providence Chamber of Commerce head Laurie White calls that a smart move. “It would be a welcome change. It’s not a game-changer. There are lots of factors that contribute to positive business climate rankings and profile, but this is certainly a welcome step.”
White says that would move the dial in the right direction. “Any time that you can lower the tax burden on Rhode Island businesses and create jobs, it’s a good thing and it’s a good stimulus and it helps to level the playing field in terms of our position vis-à-vis other New England states.”
However, critics say the envisioned cut could hurt the state’s ability to pay. Kate Brewster of the liberal Economic Progress Institute says the tax cut would eliminate 90 million dollars in state revenue over the next five years. Brewster says if the tax cut is a good idea it shouldn’t impact state revenue. She says the difference might be made up through millions of dollars in economic-development related tax expenditures.
The House Finance Committee took testimony Wednesday on the proposed cut to the corporate tax.
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