March 28, 2011

Lamenting Taxes While Endorsing Taxers

Justin Katz

The Providence Journal editorial board is right, of course, to speak out against Governor Chafee's proposed expansion of sales taxes:

This is not a matter of greed; for many businesses, it is a question of survival. Small businesses are the job engines of any economy, and when they are wiped out, jobs disappear. Rhode Island's years of suffering one of America's worst unemployment rates should have taught that lesson. ...

Taxing manufacturing machinery and equipment, which Mr. Chafee wants to do, seems especially shortsighted --- which is why 33 states, including Rhode Island, currently do not do it, Mr. Sasse notes. Encouraging productivity and innovation ultimately pays off in more jobs and higher tax revenues.

I convey the thought only half seriously, but I did wonder whether the Projo should make a habit of mentioning — disclosing, if you will — that its product will face a new tax, as well.

More broadly, the editorial is an excellent example of the paper's tendency to treat issues as if they can be constructed to generate the perfect political regime (from the writers' perspective). That is, the Providence Journal is an establishment entity, in Rhode Island, and its endorsements and policy advocacy have helped to bring Rhode Island to its current circumstances.

Hopefully those who are coming to see the folly of the Chafee Way will follow the logic back to other aspects of RI governance and politics that preceded his election.

Comments, although monitored, are not necessarily representative of the views Anchor Rising's contributors or approved by them. We reserve the right to delete or modify comments for any reason.

If they pass the tax on newspapers, I'll cancel my subscription.

I'll be sure to point out the irony of their Pro-Democrat stance and how it has now directly affected their bottom line.

Newspapers are on wafer thin ice anyway.

Posted by: Bobbbb at March 28, 2011 12:49 PM

Taxing newspapers may be a violation of the first amendment.I'm serious.

Posted by: joe bernstein at March 28, 2011 2:54 PM

For the record, the projo didn't endorse Chafee for Governor. Just saying.

Posted by: DonFanucci at March 28, 2011 3:32 PM

As evil as a sales tax increase is on top of RI's already ludicrous 8%, it doesn't violate the First Amendment as applied to newspapers. If that were true, retailers would print poetry on all of their products to avoid the sales tax.

Posted by: Dan at March 28, 2011 3:41 PM

Which is how this vindictive, petty stooge gets back at people or companies that have ever questioned his actions.


Posted by: dave at March 28, 2011 3:54 PM

Here in Florida for March. Newspapers are taxed here.

Posted by: Bob at March 28, 2011 3:56 PM


This was one of those written-during-my-20-minute-lunch posts. I realize that the Projo didn't endorse Chafee, but neither is Chafee sufficient, in himself, to impose the tax. The point is that the Projo's endorsement and advocacy history is of a generally go-along-get-along sort, treating the consequences of that approach (i.e., RI's current predicament) as an isolated issue to be addressed in isolation.

Posted by: Justin Katz at March 28, 2011 4:31 PM

Projo endorsed Caprio, a Democrat!

Posted by: Bobbbb at March 28, 2011 7:33 PM

"Projo endorsed Caprio, a Democrat!"

Stipulating for a moment your presumed point, which is that Caprio would not have raised taxes, the ProJo's endorsement of Caprio was preceded by decades of endorsements heavily weighted (to say the least) towards candidates very inclined to raise taxes.

The point, then

"Lamenting Taxes While Endorsing Taxers"

still very much stands. The paper has an almost unbroken record of endorsing taxers; or, as Justin said,

" its endorsements and policy advocacy have helped to bring Rhode Island to its current circumstances."

whereby a REALLY tax-happy candidate is in office and the paper has finally been bitten by the policy that they have been advocating for decades.

At which point, what else can we say but:

Grab a hat and a hooter, Providence Journal; welcome to the tax-opposing party!

Posted by: Monique at March 29, 2011 8:47 AM

I don't care that projo didn't "endorse" Chafee officially, by their failure to report on what an incompetent he is(and frankly I think he's developmentally challenged and his family has done a good job of hiding this from the public), the projo was a factor in helping him get elected. They treated him with kid gloves, ignored his tax cheating and surrounding himself with questionable cronies throughout the campaign - and the fact that he's a boob who can't answer a question, barely knows the very tip of most important issues, and in a state where unemployment was 12+%, a guy who has never held a job and lived off of other's largesse his entire life. (Does anyone think Linc ever supported himself in the manner to which he is accustomed by shoeing horses?) Projo used their rag to let Linc attack others, on cronyism for example, while failing to shine the camera on his own house of union cronies, long time political hangers-on (Pagliarini and Erickson), Trainor's robbing the state to start a business with RI money across the border in CT...etc etc etc. But I'm sure none of this special treatment had anything to do with his ownership interest in their parent company.

I hate the divide an conquer of pitting one group against the other when it comes to raising taxes, but in this case I wish the projo all the taxes linc can come up with.

Posted by: riborn at March 29, 2011 9:17 AM


I'm interested in your reaction to the story that appeared in the Providence Journal last week.

Fidelity to transfer workers to Smithfield

Governor Chafee said Wednesday he’s pleased that Fidelity Investments plans to expand its business presence in Rhode Island. Fidelity announced Tuesday that it will close its facility in Marlboro, Mass., over the next two years, and transfer many of the 1,100 workers to existing Fidelity sites in Smithfield, R.I., and Merrimack, N.H.

Chafee’s statement said his staff was in touch with Fidelity executives Wednesday. Chafee plans to meet with Fidelity officials soon to learn more about their plans and to discuss ways in which the state can provide assistance.

Chafee noted that Fidelity’s decision to expand its Rhode Island presence has been made in the light of his proposals to revise the state’s corporate income-tax policies.

Posted by: Phil at March 29, 2011 5:58 PM

Why do you want Justin to go first, Phil? Are you afraid to stick your neck out and actually present your analysis of the subject?

Posted by: BobN at March 29, 2011 9:16 PM

Phil- don't count your chickens before they hatch.

Remember the great progressive Evergreen Solar experiment in Massachusetts?

$60 million in taxpayer money down the drain thanks to the hubris of Deval Patrick and progressive Democrats in the MA state legislature.

It's great if RI wants to make itself more business-friendly, but the way to do it isn't insider dealings and government picking winners and losers in the market.

Posted by: Dan at March 29, 2011 9:23 PM

Don't take credit Linc. MA already had a sweetheart deal for mutual fund companies in terms of corporate tax structure. It's the other things that matter...think about that as you push for more use/sales taxes.

From MetroWest Daily

Pioneer Institute's "Measuring Up?" report clearly demonstrated why financial services firms move to New Hampshire and Rhode Island. New Hampshire payroll costs are 15 percent lower, rent costs and municipal property taxes are one-third of those in Massachusetts, electricity is cheaper and the state has no sales or use tax (New Hampshire does have higher workers' compensation and corporate taxes, but they don't even come close to offsetting Massachusetts' cost disadvantages). Comparable financial services firms in New Hampshire are almost twice as profitable as in Massachusetts.

Rhode Island's financial services cost profile is not great, but it's still lower than the high bar set by Massachusetts. Rhode Island has lower payroll costs, rents and electricity. Even though it has higher workers' compensation and sales and use taxes, financial services companies are 30 percent more profitable in Rhode Island than in Massachusetts.

Posted by: COLRJ at March 30, 2011 12:45 PM


Thanks for the information.

Posted by: Phil at March 30, 2011 6:24 PM
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