PROVIDENCE – Business opposition to Rhode Island’s proposed “millionaires tax” is holding firm despite a three-year phase-in included in a House-approved budget plan, according to the Greater Providence Chamber of Commerce.
On Wednesday, Chamber President Laurie White said the phased approach – which would gradually raise the top income tax rate on income above $1 million to 8.99% over three years – is not viewed as a compromise.
“Still seeing it as the way we did beforehand, we remain opposed,” White said. “It sends a signal that Rhode Island is imposing a tax on success. It does not address underlying competitiveness concerns.”
White said the shift from a one-year increase to a three-year phase-in has “very little” impact on business opposition.
“If anything, it raises questions about the predictability of Rhode Island’s tax policy,” she said.
White said business groups plan to continue discussions with lawmakers but do not expect major changes before final passage.
The ongoing pushback comes after the House Finance Committee on May 29 approved a budget proposal that phases in the tax over three years, beginning at 6.99% next fiscal year before reaching 8.99% in year three. McKee’s original proposal would have raised the current top rate of 5.99% to 8.99% in one step.
A month earlier, the chamber emailed more than 1,100 members urging opposition, arguing the proposal could weaken Rhode Island’s ability to attract investment.
Meanwhile, the Rhode Island Public Expenditure Council, which has also warned that higher income tax rates could hurt competitiveness and accelerate outmigration, said the phased approach does little to change those concerns.
RIPEC CEO and President Michael DiBiase said the phase-in affects timing, not substance.
“It’s still the same eventual increase to 8.99%,” he said. “Whether it happens in one step or over three years, the competitive impact on high-income earners and business decision-making remains the same.”
Despite the proposal’s advancement, DiBiase said RIPEC will continue advocating for spending restraint and policies aimed at improving Rhode Island’s long-term economic competitiveness.
The proposal comes as lawmakers prepare for a House vote on the proposed $15.2 billion fiscal 2027 budget on June 5 before it moves to the Senate.
Matthew McNulty is a PBN staff writer. He can be reached at McNulty@PBN.com or on X at @MattMcNultyNYC.
