Editorial & Opinion

Ahlquist: Governor McKee’s budget proposes interest rate cut for tax delinquents

So who exactly will Governor McKee’s tax cut help? Fortunately, we know exactly who because the Rhode Island Division of Taxation publishes a list of the Top 100 Income Tax Delinquents and a list of the Top 100 Business Tax Delinquents…
Photo for Ahlquist: Governor McKee’s budget proposes interest rate cut for tax delinquents

Published on January 25, 2022
By Steve Ahlquist

If you were to fall behind on, or simply not pay your taxes, the government will come after you, and in addition to collecting the money owed, the government will also assess penalties and interest on the outstanding balance. In Rhode Island Governor Daniel McKee‘s proposed 2022 Budget, the interest rate on taxes owed to the state will be substantially lowered, from 18% to 12%. This sounds good, because oftentimes, we might imagine, poor people fall behind on their taxes and some relief would be welcomed.

You can find this tax break on pages 143 and 144 of the Governor’s tax proposal here.


This is the second in a series of pieces about Governor Daniel McKee’s proposed 2022 Budget. See also:


But in truth, this is a tax break not for struggling families, but for rich tax delinquents. The tax break would be lowered for businesses that failed to remit sales taxes to the state: taxes the business collected when consumers purchased goods and services, but never delivered to the treasury. Also receiving a tax break will be those who have fallen behind on or refused to pay their insurance premium taxes, business taxes and state income taxes.

So who exactly will Governor McKee’s tax cut help? Fortunately, we know exactly who because the Rhode Island Division of Taxation publishes a list of the Top 100 Income Tax Delinquents and a list of the Top 100 Business Tax Delinquents.

Among those Governor McKee wants to give a tax break to is former candidate for Rhode Island Governor Giovanni Feroce, who owns over $1.2m, and is listed at his Newport address, a $4.4m home in Newport. Also on the list are William and Marielle Reilly whose address is listed at a nearly $600k home in West Palm Beach, Florida. The Reillys owe in excess of $2m in income tax.

If you are reading this, you are most likely are not on the list of people who owe hundreds of thousands or even millions of dollars to the state. More likely, if you have tax debt of some kind, it has to do with property taxes. Property taxes are levied by cities and towns in Rhode Island, and one of the reasons they are so high is that the state is constantly struggling to provide aid to municipalities because tax cuts to the rich of the kind being proposed by Governor McKee in his budget.

In Governor McKee’s recent State of the State address, he advanced the idea that his budget was “fiscally responsible with no broad-based tax increases.” That is only technically true because as the state refuses to collect revenues, and lowers taxes on those most able to pay, starved municipalities will be forced to increase property taxes. Cutting taxes in one area necessitates one of two things. Increasing taxes elsewhere, or making cuts to important government services. Governor McKee and the General Assembly leadership have already publicly declared that raising taxes on the top one percent of Rhode Islanders is unlikely to happen. That leaves cutting services.

Governor McKee’s instincts on tax cuts are pure trickle down bullshit. He seems to believe that by cutting taxes on the richest, money will trickle down to the poorest. No real economist believes this anymore (if they ever did) and policies like this continue to wreak havoc on the economy.

In the video below, Governor McKee evinces support for lowering or eliminating the estate tax, which is literally a tax on dead millionaires. Later in the same video, he proposes, for the first time and long before his budget dropped, the idea of lowering the interest and penalties on tax delinquents. When UpriseRI challenged McKee’s use of the word “usury” in the context of these penalties and taxes, pointing out the payday lenders and credit card companies have equal or even higher interest rates, Governor McKee replied, with perhaps a touch of sarcasm “Yeah, those should be gone too.”

Tomorrow we’ll take a look at a worthwhile program (and accompanying federal funds) Governor McKee has chosen to ignore, to the detriment of Rhode Islanders struggling with addiction.

Did you enjoy this article?


More Editorial & Opinion Coverage