| The Providence Journal
PROVIDENCE – Organized labor – and its allies in the Rhode Island legislature – have renewed their push for an income tax hike for high earners.
The RI AFL-CIO. SEIU. The R.I. Federation of Teachers. NEARI.
All are part of the coalition that held an online rally Tuesday for a hike in Rhode Island’s top income tax rate from 5.99% to 8.99% on estimated earnings above $475,000 to raise an estimated $128.2 million in new revenue for a long wish-list of spending items.
The advocates make this case: “This proposal will have no effect on Rhode Islanders outside of the top 1%…This proposal impacts approximately 5,000 tax filers.”
They also contend: the poorest taxpaying Rhode Islanders pay a larger share of their income, 12.1%, in sales, income, property and excise taxes than the wealthiest, 7.9%. By their calculations: the tax bill for someone with a taxable income of $500,000 would go up $750 and a $5 million taxable income, by $137,750.
Resistance is high in many circles to any tax hike to plug holes in a state budget that has grown from $9 billion in 2018 to $12.7 billion this year, with one-time “coronavirus relief” dollars being used to cover ongoing expenses.
Lt. Governor Dan McKee, who is poised to replace the departing Gina Raimondo as governor when she is confirmed, as expected, as the Biden administration’s commerce secretary, is no-committal at this point.
“Before engaging in a discussion on the specifics of any new revenue scenario for the state, the Incoming Governor and his team must have a full understanding of the budget for the upcoming fiscal year and what we can reasonably expect from the next federal stimulus,” his spokeswoman Andrea Palagi said Tuesday.
But Senate Majority Leader Michael McCaffrey, echoing the calls of the growing number of progressive Democrats in his chamber, has committed to a “more just tax system that provides relief to the working and middle class while ensuring the wealthy pay their fair share.”
Going a step farther, McCaffrey co-sponsored one of the bills to hike the top rate that is awaiting a hearing. His co-sponsors include Senate Majority Whip Maryellen Goodwin and several other members of Senate President Dominick Ruggerio’s leadership team, though not Ruggerio himself.
“Improving our tax code so the top earners pay their fair share will reduce pressure on everyone else,” McCaffrey said Tuesday. “As a share of their respective incomes, Rhode Island’s lowest income families currently pay one and a half times what the top one percent pay in taxes.”
Two of House Speaker K. Joseph Shekarchi’s top lieutenants have co-sponsored a House version of the bill, though Shekarchi himself has cautioned against doing anything that could “scare [off] high net-worth people.”
But that said, he told a Greater Providence Chamber of Commerce…