Thursday, February 23, 2012

On Rhode Island's Proficiency with Math

This is a very short Letter to the Editor I submitted to the ProJo today. I don't know if it will end up being published, so I wanted to include it in my Blog.

I want to help correct an error that keeps occurring in the discussion of raising various tax rates that has been driving me crazy. Just about everyone in this state seems to be confusing percentage point changes with percent changes. These are not the same thing.

For example, the proposed increase in the sales tax rate on meals from 8 to 10 percent is two percentage points, not two percent. Think of it this way: for percent changes, you multiply the original number by something (here .02). For percentage point changes, you are either adding or subtracting values from an overall total (here adding 2.0). If I haven't already confused you too much, going from 8% to 10% is actually a 25% increase (=2/8).

I’ll leave it to you to do the math for the proposed increase in the maximum income tax rate from 5.99 to 9.99 percent (hint: it’s not even close to 4 percent, as was reported).

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