“We must resist such counterproductive policies and act forcefully to ease our sudden entry into recession and lay a foundation for a recovery that promotes shared prosperity.“
Noting that the COVID-19 pandemic is “both a public health crisis and an economic crisis,” the Economic Progress Institute (EPI) has presented five steps our state leaders can take to respond to these twin crises effectively.
Though some “may respond to the threat and reality of recession by calling upon all of us and upon our state government to tighten our belts and cut spending,” writes the EPI, “We must resist such counterproductive policies and act forcefully to ease our sudden entry into recession and lay a foundation for a recovery that promotes shared prosperity.”
Here are the five steps the EPI says our state leaders can take to respond to this crisis effectively:
- Protect vital services: Public services help keep people afloat during rough patches so that they can continue contributing to their full potential. During the last recession, we cut investments in programs and services that help people work and that support those who are not in the workforce. Let’s not make that mistake again.
- Keep our promises to public employees: State workers play critical roles in facilitating swift access to unemployment benefits, Medicaid, SNAP, RI Works, and other basic-needs benefits for families who need this assistance. Putting such people out of work will only serve to slow the economy and our recovery.
- Resist ill-advised tax cuts: The evidence for cutting taxes to generate economic activity is weak even in good times.
- Safeguard crucial revenue sources: We should not eliminate or further cut the taxes of estates and we should also consider freezing or slowing significantly the motor vehicle excise tax phaseout which will cost the state a cumulative $300m over the next four years.
- Raise new progressive revenues: The unprecedented scope of today’s crisis means Rhode Island is likely to require substantial new revenues in the near future. EPI, as part of a coalition of groups, proposed adding a new tax bracket to Rhode Island’s personal income tax code. This new bracket would increase the marginal tax rate on the top one percent of taxpayers without necessarily cutting their consumer spending significantly.