Fall arrives when the leaves turn color, footballs fill the air and the Tax Foundation releases its State Business Tax Climate Index (SBTCI). This year, to nobody’s surprise, the Tax Foundation ranked Rhode Island’s business tax environment as the fifth worst in the United States.
Validity of the SBTCI
Economists question whether or not this ranking presents an accurate
reflection of the actual tax burden a state places on its businesses. In Grading Places-What Does the Business Climate Rankings Really Tell Us? The Economic Policy Institute concluded
that the SBTCI “ends up generating a number that has little relation to
the actual taxes falling on new business investment in a state.” In
other words, the SBTCI does not measure what it claims to measure.
Rhode Island’s leaders have neither publicly questioned nor challenged
the Tax Foundation’s methodology or ranking results. We can only
conclude that either they do not care or their silence is a sign of
acquiescence. In fact, the State Senate’s report Moving the Needle seems
to use the Tax Foundation’s ranking as a measure of Rhode Island’s
business tax competitiveness.
http://www.golocalprov.com/business/gary-sasse-is-ris-tax-climate-really-the-5th-worst/
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