Providence Business News, April 11, 2015
Even excellent leaders make their share of mistakes.
Amidst Gov. Gina M. Raimondo’s impressive first months in office, where she has taken dead aim on economic development and job creation, she has had one clunker of an idea.
That is the “Taylor Swift tax,” named after the popular singer who bought a Watch Hill mansion for $17 million. It is an additional tax on real estate valued at more than $1 million and owned by someone living less than six months a year in Rhode Island.
It is patterned after legislation originally enacted in 1984 to punish absentee owners of abandoned and derelict properties.
Unbelievably, the Taylor Swift legislation uses the same rationale to tax millionaires who, far from abandoning their property, are lavishing money on it for taxes, insurance, maintenance, security, landscaping, decoration, etc.
And many of those services are likely being provided by Rhode Islanders. That is a good thing!
Unfortunately, the business executives the governor hopes will favorably consider her excellent ideas for economic development and investment in Rhode Island are the same people who would, or could, be adversely impacted by the Taylor Swift tax. While they can afford to pay such a tax, they may well see it for what it is, a naked money grab without moral authority.
Now, is a state that does that a place where they will decide to invest? What happens if the next administration puts an “additional” tax on property owned by multinational corporations for the “privilege” of allowing ownership by large out-of-state businesses?
Recall that a prior administration put a tax on Rhode Island yacht sales, figuring the wealthy could afford it. The results were predictable. It almost killed a high-end, successful niche market in Rhode Island, and had to be repealed.
The Taylor Swift tax will net only an estimated $12 million a year, which is peanuts, even in Rhode Island. But it will have one success. For virtually no expenditure, Rhode Island is calling national attention to itself. Regrettably, that attention is as a state that wants to soak the wealthy who invest there.
We should be encouraging the Taylor Swifts of the world to invest in Rhode Island.
Hopefully, this is a trial balloon that the governor herself will soon shoot down.
Excellent leaders, after all, have a way of correcting missteps.