Corporate Tax

Inconceivable Duo-Again Invoice to Curb Enterprise Wealth

Place and Bell support laws that would allow Rhode Island to enter into “anti-poaching” pacts with other states prohibiting them from providing company-specific tax breaks or grants to lure companies away.

Modeled after the ceasefire signed by Kansas and Missouri officials in 2019, the proposal ended a longstanding economic border war that had cost hundreds of millions of dollars while creating few jobs.

The proposal targets one of the economic tools that Democratic Governor Gina M. Raimondo had in her “toolbox” for economic development. But now these economic development incentives are coming under attack from both the right and the left.

Place, the House GOP deputy minority leader, said Republicans and Democrats are more likely to agree on issues than many people might think.

“Sam and I both agree that these companies are big boys and girls – they can take care of themselves,” said Place. “If we want companies to move here, the best way to do it is to create a good business environment for everyone, not just the hand-picked friends of the elites who think they know better than us.”

Representative David Place, a Republican from BurrillvilleRhode Island House of Representatives

Bell, former coordinator of the Rhode Island Progressive Democrats, said: “I sometimes disagree with our friends across the aisle. But when we are in agreement, it is important that we work and work together. “

He noted that the Kansas-Missouri ceasefire resulted from a bipartisan agreement to end poaching that had merely moved jobs across the state line that runs through the Kansas City subway area.

Bell said members of both parties recognize that “corporate welfare” is an issue. However, some see it as a “necessary evil” and believe that if a state stops using such incentives, it will lose companies to states that continue to use them.

“If people consider it a necessary evil, I really hope they look at it carefully,” he said. “This is a solution.”

Senator Samuel W. Bell, a Providence DemocratSenator Samuel W. Bell, a Providence DemocratRhode Island Senate / Rhode Island Senate.

The legislation would allow states to enter into pacts that “prohibit any member state from offering or providing a company with a company-specific tax incentive or financial aid for a corporate headquarters, manufacturing facility, office or other real estate development in another member state as an incentive. .. to relocate. “

Six states are currently considering this legislation, including New York and Connecticut, according to lawmakers.

Too often, they said, states find themselves in a “prisoner’s dilemma” – the paradox in which two reasonable people may not work together, even when it is in their best interests to do so.

“It is best for everyone to create a level playing field for all employers without giveaways for companies,” says the bill. “But every level of government has an incentive to subsidize a company, which leads to a race to the bottom.”

The proposal provides for a national Board of Gubernatorial Appointees to help state and local governments “create a level playing field for all employers”.

The bill would exclude staff development grants that are used to train employees, as well as company-specific tax incentives or grants for companies already in the state.

Bell and Place said the bill is needed in part because “corporate giveaways promote business inequality”. The biggest companies end up having most of the public subsidies, they said.

“Corporate America is not Main Street America,” said Place. “What is going on on Main Street in Pascoag and on Route 44 in Chepachet is not representative of what is going on on Wall Street.”

And he said Rhode Island had seen some high profile examples of “corporate welfare”.

For example, the state gave 38 Studios, the unfortunate video game company of former Boston Red Sox thrower Curt Schilling, a $ 75 million loan guarantee.

He noted that the state was considering proposals to subsidize a new ballpark for the Pawtucket Red Sox before the Boston Red Sox’s Triple-A subsidiary decided to uproot and open a new stadium in Worcester.

In addition, he had objected to sales tax relief, which are intended for an expansion of the General Dynamics Electric Boat facility in Quonset Point.

Place said, “Free market and progressive thinkers recognize that the current giveaway incentive system for elite and well-connected businesses benefits not the everyday citizen.”

Edward Fitzpatrick can be reached at Follow him on Twitter @FitzProv.

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