I’m writing this from Matunuck Atelier, restaurateur Perry Raso’s newest venture.
The room is alive, the staff moves with purpose and Guests lean in. Another Rhode Island entrepreneur is betting on Rhode Island.
That’s what an economy looks like.
It's not a line in a budget, and not a fiscal projection. It's people taking risks.
Right now, Rhode Island is debating proposals to add a “millionaires tax” surtax, pushing the top income tax rate close to 9% on earnings above $1 million. Supporters see it as a way to generate needed revenue.
I understand the pressure to fund essential services. I serve on the R.I. Commerce Corp. board. I see the needs. But I also see something else.
I see founders from Westerly to Woonsocket who aren’t thinking about “millionaire status.” They’re thinking about making payroll, buying equipment, training workers, expanding space, competing nationally.
Many of them operate pass-through businesses. Their business income flows directly onto their personal returns. When top marginal rates rise, that’s not theoretical. It directly affects reinvestment decisions.
Healthy businesses run on three pillars:
- Capital at risk
- Employees who show up every day
- Reinvestment back into the company
When reinvestment tightens, everything tightens. Raises wait. Training gets postponed. Expansion slows. Hiring pauses.
That’s not ideology. That’s math.
I remember when Rhode Island made a deliberate decision to become more competitive in the region. During Gov. Donald L. Carcieri’s administration, the state reduced and simplified the personal income tax structure, cutting the top rate from nearly 10% to 5.99% and streamlining brackets. The signal was clear: Rhode Island wanted to compete for growth and shed the reputation that had weighed it down.
It wasn’t about personalities. It was about direction.
And that direction helped stabilize our reputation when we needed it most.
Today, we risk moving back toward the upper tier of income tax rates in New England. At a time when remote work makes geography more flexible and capital moves faster than ever; we should be cautious about policy shifts that could weaken our competitive position.
Gov. Daniel J. McKee often describes himself as a small-business governor. That matters. He understands firsthand what it means to run payroll, manage risk and build something over time. That perspective is valuable right now.
Because small businesses don’t wake up trying to avoid taxes. They wake up trying to grow.
If Rhode Island wants to increase revenue sustainably, the most reliable path isn’t higher marginal rates. It’s a larger, stronger tax base.
More businesses scaling.
More people earning.
More innovation commercialized.
More exports shipped.
That’s how revenue grows without friction.
At R.I. Commerce, I’m the first one out of my chair when we award innovation vouchers. I shake hands with young founders, second-career entrepreneurs and legacy manufacturers modernizing their shops.
They aren’t asking for special treatment. They’re asking for a partnership.
As I sit here at Matunuck Atelier watching Perry bring another Rhode Island dream to life, I’m reminded of what this state runs on.
Risk.
Work.
Reinvestment.
Belief.
That spirit doesn’t respond well to pressure. It responds to stability and encouragement.
Rhode Island is the birthplace of the American Industrial Revolution. That legacy isn’t something we simply repeat; it’s something we protect.
If we want more revenue, we should grow more success.
The most reliable way to strengthen Rhode Island’s finances is simple. Lift the people who are building here.
Karl Wadensten is a member of the R.I. Commerce Corp. board and president of VIBCO Inc., a manufacturing company based in Richmond. He has spent more than 25 years helping build and retain jobs in Rhode Island’s small- and midsize business sector.
Funny. All of the things claimed here to help “grow the tax base” are not affected by leveling the taxes on millionaires. As a business owner myself I know that if I take a risk, work, and reinvest in my company it won’t be taxed. Now if I take more than a million dollars out of my company and pay myself, that will be taxed. Stop with this tired talking point already.