Douglas Hall: R.I. tax ranking no cause for worry

Most Rhode Islanders share a vision of what the Ocean State should strive for: great schools for our children, safe roads and bridges, vibrant communities, prosperous families, and access to affordable health care, housing and child care. The primary way we pay for these things is through our taxes.

The collective hand-wringing brought on by Rhode Island’s placing on the latest Tax Foundation’s “State Business Tax Climate” is misguided at best, and at worst points to public policy choices that could undermine, rather than facilitate the Ocean State’s economic growth and recovery.

When we look at the Tax Foundation rankings, we see pretty quickly that the states at the top of the “worst business tax climates” list — New Jersey, New York, and California — are states with robust economies and vibrant businesses. In fact, the bottom five states on the Tax Foundation list account for about a quarter of the nation’s business establishments, total annual payroll, and number of employees. America’s businesses have clearly indicated they aren’t dissuaded from operating in such supposedly harsh business tax climates.

The “Top Five” states, meanwhile, measure in the single digits on the same measures. (The top three states — Wyoming, South Dakota, and Alaska — rely heavily on the oil industry to support both their economies and their state budgets, which is clearly not a strategy that can be replicated in states lacking significant oil reserves).