With Democratic gubernatorial candidate Frank Caprio already airing campaign commercials, a main emphasis is his professed desire to help the small businesses that provide most jobs in Rhode Island. The state treasurer has talked up this concept during appearances, including his November 25 visit with Drinking Liberally.

The short version of Caprio's pitch: too great a quantity of the state's tax incentives go to big corporations. If these incentives were reallocated to small businesses, Caprio says, it would make a significant dent in Rhode Island's higher-than-national unemployment rate.

But considering how many small businesses are struggling with their sales, are tax incentives really sufficient to spark a broad and sustainable increase in hiring?

Caprio responded in the affirmative when I asked him about this at the Drinking Liberally event. I wasn't taking notes, but his emphasis seemed to be that the state can do a much better job of helping small businesses. Few people would disagree.

But are targeted tax incentives truly a realistic way of raising small business employment? I put the question, via e-mail, to two University of Rhode Island economics professors, Leonard Lardaro and Richard McIntyre. Lardaro was the first to respond:

RI needs to place a greater emphasis on small business in general. The idea of targeted tax incentives sounds good at first, but something very atypical for Rhode Island needs to be done first: after specifying the specific incentives, study their likely economic effects (both short-run and long-run) and ascertain whether these would be the most effective means for stimulating economic activity here (part of this would be to determine if there are better ways to do this). A major problem for small business, though, no matter whether you look at Rhode Island or elsewhere, is that banks are not lending as much as small businesses need.

So, even with assistance from the federal government, this lack of available funding will continue to hinder the likely success of proposed measures to stimulate small business here. But let me finish with a final thought: while Rhode Island is disproportionately a small business state, is that the way it has to be (or needs to be for that matter)? If RI were to clean up its tax and cost structure from top to bottom (i.e., taxes, fees, regulations, electricity costs, and problems with skills of our labor force), this would help not only small business but business of all sizes and possibly make the size makeup here less lopsided.