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Mon June 9, 2014
Economic Progress Institute Says Budget Benefits Wealthy, Hurts Poor Rhode Islanders
The liberal-leaning Economic Progress Institute says the budget slated for a House vote Thursday provides $9 million in tax breaks "to the heirs of wealthy estates," while cutting $3.9 million in tax benefits for low to moderate-income Rhode Islanders.
The EPI says the $3.9 million cut comes through modifying the earned-income tax credit (EITC) "and eliminating the property tax relief circuit breaker program for low- and modest-income Rhode Islanders who are not elderly or disabled. Total net state spending on low-income tax assistance will not get back to today’s levels until Fiscal Year 2016."
The institute says changes in the inheritance tax, including increasing the exemption to $1.5 million, will cost the state $9 million in fiscal 2015 and $18 million the year after that.
The Greater Providence Chamber of Commerce and the editorial page of the Providence Journal have praised the budget passed by the House Finance Committee last Thursday as a good one for improving the state's economy.
But in a statement, the Economic Progress Institute says, "Despite the claims of tax cut supporters, the Institute reports that research has found state tax variations have a negligible impact on where people choose to live. While some studies indicate that estate taxes have a small effect on the relocation decisions of very wealthy elderly individuals, the number is so small that any revenue losses were more than made up by the overall revenue generated through the estate tax itself."
The conservative-leaning Rhode Island Center for Freedom and Prosperity has also rapped the budget for booster upper income Rhode Islanders at the expense of the middle class.