I'm skeptical of Governor Carcieri's plan to cut taxes.  Before I get into the problems, let's focus on the part I like.  The Governor has proposed raising the estate tax threshold from $675,000 to $1 million.  It's about time this level has been increased.  Besides being one of the lowest in the nation, it has been at the same level for quite some time, meaning it affects more and more people each year.  For a couple or individual who worked hard all their life and saved responsibly, it isn't unreasonable for them to accumulate more than $675,000.   The level definitely needs to be raised. 

     Now for the parts of the Governor's plan that leave me shaking my head.  First, we have a new simplified plan to tax individuals.  I like the idea of a simplified plan, but I do not like the idea of more than 100,000 Rhode Islanders getting a tax increase.  By removing deductions for property taxes and mortgage interest, people who are already struggling in a recession will have it that much worse.  Second, I'm not pleased with the idea to eliminate corporate taxes. 

     I normally support large tax cuts and oppose increases, but in the economic situation the state is in, we shouldn't do either.  Our first step should involve making cuts to get the budget in order while holding taxes steady.  Once Rhode Island's finances stabilize, then we should consider cutting taxes, but not the corporate tax.  Ideally, we should maintain the corporate tax and gradually eliminate the income tax, since that would positively affect more Rhode Islanders.

     I know the initial response would be negative, but it could certainly be done with smart budgeting.  I also think it is more likely that individuals would make decisions to relocate here based on the personal, rather than the corporate income tax, which would increase the pool of tax payers and consumers.  It is something that should be examined when our finances stabilize, but I won't hold my breath.