A plan for the sales tax
To the Editor:
At a recent meeting of the Special Joint Legislative Commission to study the Sales Tax Repeal Act of 2013, John Simmons, executive director of the Rhode Island Public Expenditure Council (RIPEC), suggested revamping Rhode Island's revenue system to make sure that it is fair to all tax payers.
I would suggest that Rhode Island's sales tax rate be reduced to 3 percent on all taxable items and that food and clothing be included in the list of taxable items. Many credit card companies give discounts between 1 percent and 5 percent on items purchased using their credit cards, which would reduce the financial impact of this new broad-based sales tax rate on Rhode Island's shoppers. Business at hotels, restaurants, taxicab companies, automobile dealerships, dog groomers, shopping malls and department stores would greatly increase and overall sales tax revenue would also probably increase.
Next, Rhode Island should increase funding for education to a point where local communities can reduce their property taxes by 15 percent. Instead of giving grants in aid and low interest guaranteed loans to a few lucky companies, it would be more productive to spend an extra $250 million each year on education and lower the property taxes for every Rhode Island business and for every Rhode Island homeowner by 15 percent.
Finally, Rhode Island should reduce its income tax rate by 15 percent.
When the above three steps are completed, many businesses and people will move to Rhode Island to take advantage of the low income taxes, the low sales taxes and the low property taxes. Employment will rise, home foreclosures will drop and property values will increase.