The state could collect a much-needed $66 million in additional revenue by raising the income tax rate the richest 2 percent of residents pay by 2 percent. That’s the message tax equity advocates will announce at a press conference at the State House this afternoon.
“We can’t keep going down this failed path,” said Kristina Fox, who works for Ocean State Action. “RI needs a more equitable tax code that brings in revenue fairly to fund public programs and services that we all benefit from.”
Rep. Maria Cimini and Senator Juan Pichardo, both of Providence, are sponsoring a bill that would roll back some of the tax cuts bestowed on the richest Rhode Islanders during the previous decade. Their proposal would raise the rate from 5.99 percent to 7.99 percent of those who make more than $250,000 a year.
“This is a common sense solution to the biggest problem facing our state,” Fox said.
Tax advocates say the additional revenue could be used to increase state aid to cities and towns. When former Gov. Don Carcieri and the legislature gave tax breaks to the rich, they did so in part by slashing aid to cities and towns. This is what led to the financial catastrophes in Providence, Central Falls, Woonsocket and West Warwick.
Not only did Rhode Island’s urban areas struggle because of the rapid decline in state aid, but the rationale for the tax cuts never materialized. In fact, unemployment in Rhode Island has skyrocketed since the tax cuts of 2006 and 2010 and the cuts in state aid, which you can see in this chart:
Or you can watch this video that the group Rhode Islander for Tax Equity created last year: