A Providence Journal editorial, published yesterday, once again took as gospel Rhode Island’s ranking in the Tax Foundation’s State Business Tax Climate Index. The editorial was happy that our state moved from #44 in the rankings to #41. “But obviously,” says the editorial, “there is more work to be done.”

How terrible of the ProJo to ignore writing on its own pages that directly refutes the validity of the Tax Foundation (and other state rankings as well).

About a year ago, in response to last years 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.”

Hall noted that three of the sates with the “worst business tax climates” are New Jersey, New York, and California, sates that are doing great in business. The top three states, Wyoming, South Dakota and Alaska all have robust fossil fuel extraction economies. That’s not something Rhode Island can emulate.

In essence, these 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.”

Kowtowing to these business rankings perpetuates a race to the bottom which benefits no one but the one percent. The ProJo knows this, they have printed this in their own pages, but they continue to pander this lie to convince you that your interests and the interests of corporations somehow align.

Be wary of tax cuts suggested by anti-tax economic fundamentalists. They are not providing facts, they are selling you a fiction that will ultimately cost you everything.

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greg gerritt

More and more evidence piles up that the rankings on business climates are a complete scam. Often funded by some of the most retrograde rich people in America, the rankings are based on how much you are willing to give rich folks, AND there is absolutley JNO Correlation betwen business climate rankings and economic performance. That the ProJo refuses to understand this despite repeated wrtitings by highly reputable sources pointing this out points out the ideological rigidness of the ProJo and the complete cluelessness of RI’s politikcal establishment. I have repeatedly asked the proJo/s business writers to look at the data coparing business cliamtes and growth rates, but they refuse.