November 25, 2008

"Shop Here, Live Elsewhere"

Justin Katz

Be sure to take in RI Treasurer Frank Caprio's infomercial-style ad proclaiming Rhode Island's lack of sales tax on clothes. As the Providence Journal reports, the above-linked Web site is part of a broader campaign (and I don't mean Caprio's 2010 bid for governor):

Through a billboard sign that went up yesterday morning on Route 95 south on the Massachusetts border, and a Web site — — that went live yesterday, Caprio will try to get out-of-staters to consider shopping for clothing here. "We in Rhode Island need to brand our state — especially when it comes to the retail trade," Caprio said. "We're not seen as a tax haven for clothing or anything else."

So here's a question: If tax savings on clothing will attract regional shoppers to Rhode Island, why wouldn't a lower tax burden on everything else have a more profound impact? The state's message shouldn't be "shop for a limited category of retail goods in Rhode Island"; it should be "live, do business, and invest in Rhode Island."

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Occasionally liberal idiots will be forced to acknowledge realities. Like, in this case, that lower taxes are an incentive for people to move money around in the economy.

Now, try to convince the other idiots that lower taxes will INCREASE revenue and watch their eyes glaze over.

Posted by: Greg at November 25, 2008 12:58 PM

I've been saying for a while that we don't even need to eliminate sales tax, we just need to make it lower than MA (which is already lower than CT). Just about everyone in the state lives near a border and can pretty easily get to one of the other states. I would never buy something in RI (hmm, Christmas shopping?) when the MA border is so close. However, if the Assembly dropped the sales tax rate to even 4%, I'd buy everything in RI. Then the "gas price wars" would be on between the states for the lower sales tax. The businesses bordering RI would notice a big drop in business and clamor for MA to match or beat RI's 4%. Then we'd have to do the same in RI.

It's simple economics. Humans respond to incentives. Paying less money is a big incentive. Until RI changes the sales tax rate, I'll keep up with my incentive to shop in Seekonk/Attleboro.

Posted by: Patrick at November 25, 2008 1:24 PM

I buy all my gasoline in Massachusetts and most of my other taxable purchases too...unless I can order them online and avoid the whole thing.

When my state leaders finally decide to lead, I will follow.

Posted by: John at November 25, 2008 2:18 PM

This is nothing more than a PR hoax.

MA has no sales tax on clothing items costing less than $175. CT has no sales tax on those clothing items costing less than $50. And, when there is a tax for items costing more, it is only on the amount that exceeds those figures.

I am going to guess that the money to be saved in its entirety will not exceed the cost of the ad Caprio paid for.

Wake me up when the grownups are back with some real solutions to our problems.

Posted by: Mike Cappelli at November 25, 2008 4:28 PM
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