tailieunhanh - RAISING REVENUE FROM HIGH-INCOME HOUSEHOLDS IN RHODE ISLAND

Another concern over raising taxes on high-income households is that it might influence decisions to start businesses. If increased taxes reduce returns to investing in small business ventures, high-income individuals might be less likely to take risks, and entrepreneurial activity might decline. Some studies conclude that higher taxes reduce entrepreneurship, but a greater number conclude the opposite. Dozens of studies examine a range of variables that might influence this behavior: the impact of taxes on start-up rates, taxes and levels of entrepreneurship according to a range of definitions, combined federal and state rates and numbers of sole proprietors, levels of investment. | ECONOMIC PROGRESS REPORT The Economic 11 Progress Institute formerly The Poverty Institute RAISING REVENUE FROM HIGH-INCOME HOUSEHOLDS IN RHODE ISLAND MARCH 2012 Co-authored by Jeffrey Thompson Political Economy Research Institute University of Massachusetts Amherst Rhode Island residents and businesses make a collective investment in our state by contributing towards the cost of public services and amenities that help create jobs and enhance our quality of life. The state s ability to protect our families and businesses educate current and future workers repair roads and keep buses running and provide health care to families seniors and people with disabilities depends on local state and federal revenue. Over the past several years our ability to raise the revenue necessary to fund public services was weakened due in part to tax cuts for high-income households. This year there are a number of legislative proposals that would raise the income tax rate paid by higher-income taxpayers and restore the revenue necessary to build a strong economy. This paper is a summary of a comprehensive study of the literature analyzing the impact of raising taxes on high-income households prepared by the Political Economic Research Institute PERI at the University of Massachusetts at Amherst and incorporating Rhode Island-specific information. The full study is available at . INTRODUCTION State and local tax systems are regressive they tax low-income households at higher rates than high-income households. This issue has come to light as some states looking for ways to respond to the collapse in tax revenue following the Great Recession have turned to tax increases targeted at high-income households. Alongside the budget cuts that were adopted by every state this new tax revenue can help sustain public spending on vital services including education public safety and infrastructure. The state s ability to protect our families and businesses educate current and future

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