Letter: Newport's Two Marshmallow Moment

Robert Bailey submitted this letter to the Editor about state taxation.

A single marshmallow is placed before the child. 

He is told, " I need to leave the room. If you don't eat this marshmallow, I will give you another one, and you can eat them both." Can the child hold out? This famous psychological test,  designed by Stanford Prof. Walter Mischel, tests one's ability to defer gratification for the greater reward.

The governor, his tax staff, and the Legislature would, likely, eat the single marshmallow. Most Newporters would do better.

Mr. Chafee opened offering the legislature one percent taxes on currently untaxed items; they balked. During the campaign he told me that he questioned whether Curt Schilling's loan guarantee wasn't actually a loan. Once in office, the governor embraced it, regardless. Recently, Mr. Chafee proposed increases on the salaries of state directors; then suggested lifting the meal and beverage tax. Most of Newport's tourism-related taxes already go straight to Providence.  

Business people know that targeted taxation, credits, and exclusions are patently unfair. We also understand why a flat and broad tax base is high-octane for economic growth. As the co-chair of Newport's comprehensive land-use plan, my colleagues and I have struggled to identify strategies to help the city council attract (and keep) money in Newport. Some of those concepts include: public-private partnerships, increased city density, a year-round economy, and an ombudsman for City Hall.

If the state followed Newport in broadening its tax base, it would soon be among the best states for business. The tax base would be fair, equivalent and highly productive (fewer loopholes, more tax dollars). By contrast, a state that considers taxing tax preparation, as RI has, is borderline absurd, and so, irrelevant to the global economy.

Newport has a few of its own strategic economic advantages.

At its best, the city manager form of government insulates day-to-day management from politics. Managed well, the City mirrors a well-balanced corporation: City manager/CEO, Mayor/Chairman, City Council/Board of Directors.
A growing national program, "Strong Cities Strong States," shows that fiscal success follows decentralizing state government.

Say "Rhode Island" and most people think, "Newport!" City Hall should be marketing that singular advantage, but from the inside out. 

Jack Kemp used to say: "Tax the behavior you don't want, subsidize behavior you do want." 

Where political tax policy is the politicians' social tinker toy, he's right. By contrast, broadening Newport's tax base and mastering inside-out policies are local and achievable.

To count on the ruler of Smith Hill and the mob of dim lights in the seats is futile. For its part, Newport has an unusual opportunity to run from the inside-out for the first time since the head of the island was a Wampanoag.

Gordon February 26, 2012 at 01:33 AM
Robert Bailey always gets it right. It is time to listen to some new voices in planning for Ri's future.


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