The Uprising! January 4, 2019

Welcome to The Uprising! By my count this is my 53rd straight weekly wrap up. Let’s do this thing!

 

3f. State Rankings are Bullshit

In his speech to the House after securing his Speakership, Mattiello outlined his legislative priorities.

“We need to reduce regulatory burdens that hamper our businesses. We need to support programs that ensure that Rhode Islanders are well trained for the jobs of the future. And we must continue to lessen the tax burden on all of our citizens. My number one priority will be phasing out the car tax and eliminating it completely…

“Cutting the car tax has improved our competitiveness nationally, moving us up in the rankings. And just a few months ago, I was proud to accept, on behalf of the entire House, and award from the Tax Foundation, a national, non-partisan organization for our collective efforts in creating an improved tax policy.”

State rankings are bullshit, and Mattiello, as well as all our elected representatives, should know better.

In 2016, in response to a Tax Foundation report, Economist Douglas Hall, director of Economic and Fiscal Policy at the Economic Progress Institute, wrote an oped explaining why these rankings are worse than meaningless and actually quite harmful.

Hall wrote, “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.”

State rankings are useless and dangerous. Grading the States, a website that tackles the issue of these rankings and exposes their serious flaws, is a great resource to learn more about this problem. Their one line analysis of the Tax Foundation’s business ranking?

“Combining more than 115 features of state tax law into a single index number produces a state ranking that turns out to bear very little relationship to what businesses actually pay in one state vs another.”

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