The idea is to stimulate commercial activity in Rhode Island. People with low or moderate income are far more likely to spend their money within their community than the super-rich. So it makes sense for the government to reward companies that give more to lower-paid workers and less to CEOs.
Doug Smith, co-founder of a group called Econ4, testified:
Rhode Island currently faces a crisis of income and wealth inequality. Between 1979 and 2007, the top 1% of Rhode Islanders captured 32.6% of total income growth in the state.
For comparison purposes, the 32.6% that has gone to Rhode Island’s top 1% is dramatically higher than the 23.6 percent of income going to the top 1% of Rhode Islanders in 1928 – on the eve of the Great Depression.
Rhode Island’s economy, also like the rest of the nation, is substantially consumer-driven – two-thirds or more of any growth comes when people buy goods and services. The top 1% in Rhode Island have ample money for spending. But studies – and common sense — indicate that the super wealthy do not devote as high a percentage of their income to consumption as do the bottom 99%. For Rhode Island’s economy to have any chance whatsoever of real recovery and growth, at least one imperative stands out: The state must get more money in the pockets of the 99%.The bill is Senate Bill 2796. It is being considered by the Rhode Island Senate Finance Committee.