December 1, 2008

What's Tom Talking About?

Justin Katz

Once you get over the fact that they make a living doing for the left what we on the right must do as a hobby, a messaging guy like me really has to sympathize with the plight of those charged with maintaining the components of the status quo that have done so poorly for Rhode Island. How to present Rhode Island's predicament as such that it needs more poison? Well, here's one tack (emphasis in original):

The highest taxes? Please. New Hampshire is a tax haven, right? Some of it is, but if I were to move from my home here to a comparable house in Jaffrey, Keene, Peterborough, or any equally unfashionable town, my total taxes would increase even without a sales or income tax. Our state and local taxes are lower than the national average, according to the Tax Foundation rankings whose poor methodology actually exaggerates the impact of our income tax. (We rise to 10th in their rankings only when they add the taxes you and I pay to other states, I kid you not.) There are at least 27 other states with higher sales taxes for at least some of their counties than we have. We have high property taxes, yes, but can you fix that by level funding the cities and towns while piling on new mandates?

Because Tom Sgouros provides no sources for his New Hampshire assertions, I'll leave them alone, except to note the excess of wiggle room when comparing specific towns across state lines, as well as defining "comparable." The Tax Foundation argument, however, is worth a closer look.

The inclusion of out-of-state taxes isn't the only reason that "we rises to 10th" in the Tax Foundation rankings. Our relatively low average income is another. The Tax Foundation table shows that Rhode Island ranks 17th for absolute per capita taxes paid in state, but because we're #8 for taxes paid out of state, we come in at #12 overall.

We rise the extra two ranks when that dollar amount is expressed as a percentage of average household income. Granted, we're a small state, so a larger percentage of our population is likely to work and shop beyond our borders, but if one is looking at the state as a potential place of residence and business, taxes paid are taxes paid. Even this argument, however, allows too much, because the in-state-only ranking is a bit misleading, as is Sgouros's astonished declaration that our taxes are "lower than the national average"; that's the case only because the range of state taxes goes out more dramatically on the high end.

Changing measurements to deal with this imbalance, it proves true that Rhode Island's in-state tax burden is 21% higher than the national median. For perspective about why that matters, consider that Rhode Island's in-state taxes are farther above the median than the lowest-taxed state is below it. It's worth noting, too, that our progressive income tax would translate into a worse ranking as we succeed in attracting those coveted high-paying jobs.

Which brings us to the aspect of Sgouros's essay that really reads as spin:

This shortsighted perspective [of lowering taxes], and the determination to pursue it at all costs, has thoroughly ruined the service side of the equation, and given us the worst of both worlds: devastated services and higher state and local taxes. Bankrupting the state is not a route to prosperity.

We are a relatively poor state and proportionately very urban. We may not ever be able to be a low-cost state, but that doesn't mean we can't compete, as DandyID shows. We have other high cards: a beautiful state, a hip capital city, a fabulous art scene and more. What we don't have is policy makers willing to play them.

One might understand Tom to be arguing that DandyID, which he briefly profiles, points the way to the services that Rhode Island provides. In the preceding text, however, he lists "affordable office space," which is an indication of broad vacancy, Geek Dinners, which are a private initiative, and RI Nexus, which is a corporate database maintained by a quasi public organization. That's hardly a collection of assets threatened by deep cuts to state government spending (with the possible exception of the office space, which will go up in price if the state gets out of the private sector's way). On the other hand, it may be telling that DandyID, despite its office in Pawtucket, is not registered as a corporation in Rhode Island and still has its Internet domain registered in Colorado.

Be that as it may, if Tom wants to include government services that will help make Providence even hipper and the state art scene even more fabulous, he ought to argue for redirecting the revenue from his union clients and social service allies. Otherwise, we citizens who pay so much in out-of-state taxes will continue to conclude that we might as well pay them all elsewhere.

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They still count as jobs coming to Rhode Island, even if neither The Don not the General Assembly lifted a finger to make them happen.
Guess they're no-count lefty jobs if the elected politicians didn't have a hand in them. But when was the last time R.I.'s legislative or executive branches did a thing to create jobs?

Posted by: rhpdy at December 1, 2008 3:04 PM


Your point, with which I agree, isn't in contradiction to mine. Putting aside one founder's roots, here, the DandyID jobs came to Rhode Island based on (1) low-cost office space, (2) private/semi-private initiatives, and (3) an amenable environment. "Government services" have very little to do with any of that and, indeed, can hinder it.

Posted by: Justin Katz at December 1, 2008 3:09 PM


You wrote "his union clients and social service allies". If that's true, than the "RI Policy Reporter", isn't a reporter at all, but a union public relations man. Again, if true, I'm not sure how he looks himself in the mirror.

Posted by: Rasputin at December 1, 2008 3:32 PM

For clarity:

By "allies," I mean mainly ideological, although Tom has done work supporting legislation favored by the Poverty Institute types.

By "clients," I don't mean to say that all of Tom's endeavors (e.g., the Policy Reporter) are union-sponsored, but I do know that he does consulting work for that crowd. Regarding how his income breaks down, I have no specific information.

Posted by: Justin Katz at December 1, 2008 4:15 PM


Again, if what you're saying is true, I'm not sure how one can be on the unions payroll, and then objectively report about issues concerning them!

Maybe the RI Policy Reporter can let us know how he stays objective when he receives money from the unions, which he seems to defend regularly.

Posted by: Rasputin at December 1, 2008 4:40 PM

"stop the moaning"

Posted by: Mike at December 1, 2008 5:39 PM

As a general observation, one exception does not a rule make.

>> We have other high cards: a beautiful state, a hip capital city, a fabulous art scene and more. What we don't have is policy makers willing to play them.

All of which have been in place for some time now, and all of which our public officials have been using, for years now, as a crutch to excuse Rhode Island's decades-long economic underperformance. Obviously that "great quality of life" that we hear about ad nauseum isn't cutting it.

Rhode Island is mirroring Michigan with its stratospheric unemployment rates, years of economic decline and collapsing infrastructure. Michigan kinda-sorta can point its finger to the collapse of the UAW-strangled "Big Three" automakers. Rhode Island doesn't even have that excuse - situated between NYC and Boston/128 Rhode Island should be faring well in spite of the national downturn, at least relative to other states.

Once the principals of DandyID get older, and if their company is successful, they'll leave. For by then they'll realize that there is a far better "corporate quality of life" elsewhere.

States that see businesses as assets rather than revenue sources to be exploited until the golden goose is dead.

States where the infrastructure isn't collapsing due to chronic lack of maintenance (in spite of high taxes).

States where their income won't be "progressively" ratcheted into higher brackets, merely because after years of work and sacrifice they're starting to enjoy the fruits of theirs (not the state's or the needy's) labors.

States with at least average public school systems, providing a relatively qualified workforce (compared to Rhode Island's sub-average public schools and increasingly functionally illiterate workforce).

States where political corruption is an occasional anomaly, rather than systemic and culturally accepted, if not embraced, as it is in Rhode island.

States with right to work and other employee / employer friendly laws, rather than Rhode Island's 1930's-like union boss hegemony.

Any business with a choice of locale would be crazy to locate in Rhode Island. Years of "business climate" surveys attest to this fact, as does years of economic decline in Rhode Island.

Cherry-picking and spinning financial information won't change that reality, any more than chanting "great quality of life" won't change that reality.

Posted by: Tom W at December 1, 2008 7:40 PM

In other words, there's PLENTY of room to raise taxes.

Seriously, between this and Crowley talking up unfunded pension liabilities, the RI Dem Party must have a contest going to see who can say the most far-fetched positive thing about some aspect of the mess that decades of Dem control has gotten this state into.

Posted by: Monique at December 1, 2008 10:19 PM

"What's Tom Talking About?"

He's talking about Utopia ... which is Greek for "no place" ... which is exactly where we are headed.

He's a hard person to take seriously, because he already has his conclusions set, and he only "looks" for the kind of evidence which may serve to back his outlandish claims, often to the exclusion of what's actually happening. However, I do enjoy when "Annoying Tom" calls in on the radio. He's persistent.

It's interesting, the definition of "Utopia" sounds an awful lot like what some have tried to do with Rhode Island:

Utopia is a name for an ideal community, taken from the title of a book written in 1516 by Sir Thomas More describing a fictional island in the Atlantic Ocean, possessing a seemingly perfect socio-politico-legal system. The term has been used to describe both intentional communities that attempted to create an ideal society, and fictional societies portrayed in literature. "Utopia" is sometimes used pejoratively, in reference to an unrealistic ideal that is impossible to achieve, and has spawned other concepts, most prominently dystopia.

Welcome to Dystopia!

Posted by: Will at December 2, 2008 12:43 AM

It was going there-meaning an income tax increase and probably a broader "sales tax"on services -all along.The lemmings of RI returned most of the regualr turds to the Statehouse anyway.Now their master George Nee will order them to raise the income tax.He said so on Channel 10 News Conference-he usually gets what he wants out of the GA.Whose fault is that?Not his.He hasn't got a vote in the GA personally.He flat out stated that those who work or get pensions have to carry the ones out of work or on disability.He didn't mention the people who gravitate here solely for the benefits.I know specifically of one person who moved here from MA-she has 4 kids,never worked-has a live in boyfriend who "chills"all day,gets EBT,AFDC,Section 8 housing,etc.The Poverty Institue welcomes more and more non productive people who never even tried to be useful to this state so they(the Poverty Institute)can gain more power.Their worst nightmare is someone bettering themselves.My anger is directed at the "poverty industry"-the "nonprofit" paper pushers who almost seem to resent anyone who hasn't been a lifetime leech.How many of them are paying their fair share of taxes?
MA doesn't tax pensions.RI is a beautiful state that has been turned into a sewer by the social engineers.
I hope the people who elect Tom Slater,Rhoda Perry,Art Handy,Edith Ajello,Charles Levesque,and the rest of their gang are happy being raped by their "representatives".

Posted by: joe bernstein at December 2, 2008 4:58 AM

Great analysis as usual Joe. Nee also said he wantsgas tax hiked. More good news for Massachusetts. I wish they would have the chutzpah to put their wn Caprio-esque bill boards on the border highlighting the very real sales, income, property and excise tax advantages that state offers beleagured RI residents.

Shop Mass.
SCREWRI-and the crooks who run it.

Posted by: Mike at December 2, 2008 9:08 AM

On his own website,, Sgouros describes himself as "a permormance artist", "documentary filmaker", "tight-rope walker" and......"clown".
Clown. Get it-it's all performance art. He doesn't believe a word of the insanity he spouts. In a few years we will be seeing a documentary on a state whose majority is so greedy and/or stupid to believe that 2 +2 = $85,000 (plus lifetime COLA's and free health care).

Posted by: Mike at December 2, 2008 5:35 PM

"to believe that 2 +2 = $85,000 (plus lifetime COLA's and free health care)"

Damn. Love that new math.

Posted by: Monique at December 2, 2008 8:40 PM
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