House Bill 7127 Article 5, Section 6 would impose a tax rate of 8.99% on taxable income over $1.0 million. This would raise the tax rate on such income by 50% over the current top rate of 5.99%. This proposal carries significant and long-term risk to state revenues and the economic opportunities of all Rhode Islanders.
RIPEC has shared research and analysis examining the potential impact of tax increases on high earners. A dramatic increase in the income tax rate for higher income individuals, families, and businesses threatens to undermine Rhode Island’s already weak competitive standing. Any potential revenue gains would likely be eroded over time by increased out-migration. Even more significant than the loss of income tax revenues is the likely loss of business activity, investments, and other tax revenues.
See RIPEC’s library of publications, media, and advocacy relating to the proposal below.
Policy Brief: Rhode Island's Millionaire's Tax Proposal
May 2026: Governor Daniel J. McKee has proposed adding a fourth income tax bracket in his FY 2027 budget, which would tax income over $1.0 million at 8.99 percent—a 50 percent increase over the current 5.99 percent top rate. RIPEC’s analysis finds that, if enacted, this would reduce Rhode Island’s tax competitiveness and could lead to increased domestic outmigration, particularly among higher-income taxpayers who account for a disproportionate share of economic activity and tax revenues.
Policy Brief: Taxing Top Earners
April 2025: RIPEC’s 2025 policy brief “Taxing Top Earners” examined the potential consequences of a tax hike that was considered by state lawmakers last year.
In the News
“Rhode Islanders have to work hard and live within their means – and state government should, too. Businesses and working families deserve to live in a state that is affordable, predictable and competitive. Those goals are not in conflict, but they are put at risk when the policy conversation is derailed by a tax gimmick like a so-called “millionaire’s tax” that is once again being floated by state leaders.”
RIPEC President & CEO Michael DiBiase and Greater Providence Chamber of Commerce President & CEO Laurie White co-authored an op-ed in the Providence Journal. They examine Rhode Island’s fiscal outlook and the potential impacts of the proposed tax increase on higher earners.
They highlight concerns about state spending growth, tax competitiveness, and the effects on small businesses, emphasizing the importance of fiscal discipline and long-term sustainability in state policymaking.
“With federal aid and state revenue growing at a relatively stable rate, state policymakers should consider the risks to the state’s competitiveness that would result from imposing a 50% tax increase on high-earning individuals and businesses,” said Michael DiBiase, RIPEC’s CEO and president. “Instead, the state should be scrutinizing the return on investment of the extraordinary increase in state tax dollars and spending that have accumulated over the past several years.”
“Increasing taxes on top earners would worsen the state’s already unfriendly tax environment for businesses and some residents, DiBiase said.”
“With federal aid and state revenues growing at a relatively stable rate, state policymakers should consider the risks to the state’s competitiveness that would result from imposing a 50 percent tax increase on high-earning individuals and businesses,” said Michael DiBiase, RIPEC’s president and CEO.
Advocacy
RIPEC President and CEO Michael DiBiase testifies before the Rhode Island Senate Committee on Finance in opposition to House Bill 7127, Article 5, Section 6.
RIPEC President and CEO Michael DiBiase testifies before the Rhode Island House Committee on Finance in opposition to House Bill 7127, Article 5, Section 6.