Revenue for Rhode Islanders coalition announces 2024 Millionaires Tax campaign
"Our current tax system disproportionately burdens the middle and lower classes while allowing the ultra-rich to exploit loopholes and evade paying their fair share of taxes."
The Revenue for Rhode Islanders coalition kicked off its 2024 campaign on Tuesday to raise revenue for the state by creating a separate surtax – at a marginal rate of 8.99% (in place of the current top rate of 5.99%) on income above $1,000,000, ensuring those making more than $1,000,000 per year are contributing their fair share. The legislation, Senate Bill 2355, sponsored by Senator Melissa Murray (Democrat, District 24, Woonsocket, North Smithfield), and House Bill 7338, sponsored by Representative Karen Alzate (Democrat, District 60, Pawtucket, Central Falls), is estimated to raise $126 million in new tax revenue, and would only apply to taxable income above $1,000,000. It is estimated to impact only 2,134 Rhode Island tax filers.
“It's no secret that in our world the gap between the wealthiest individuals and the rest of the population continues to widen. Covid highlighted this. As many struggled to make ends meet a privileged few amassed unimaginable wealth,” said House bill sponsor Representative Karen Alzate. “This brings us to the topic of taxes, specifically the urgent need to raise taxes on the wealthiest 1% of Rhode Islanders. It's about fairness and sustainability. Let me explain to you why - for the fifth time.
“First and foremost, raising taxes on the wealthiest individuals is about leveling our playing field. Our current tax system disproportionately burdens the middle and lower classes while allowing the ultra-rich to exploit loopholes and evade paying their fair share of taxes. By increasing taxes on the 1%, we can begin to balance this equation and ensure that everyone pays their fair share.
“Secondly, investing in our society requires resources. This bill will provide a restricted receipt account to be used for affordable, reliable, and quality childcare, early learning programs, quality public education, affordable public colleges and universities, and the repair and maintenance of roads and bridges. (Yesterday we all heard that the bridge is going to cost us much more money.) And of course, near and dear is our public transportation system that is failing us.
“Essentially, services rely on tax revenue. By increasing taxes on the wealthiest, we can generate the necessary funds to invest in the well-being and future prosperity of all citizens, not just the privileged view. The restricted receipts account and what that money will go to will make Rhode Island a much healthier, more equitable place for people to live.
“Moreover, raising taxes on the wealthiest can help Rhode Islanders address the growing wealth gap, which poses a significant threat to social cohesion and economic stability. When a small fraction of the population hoards wealth while others struggle to make ends meet, it creates social unrest and undermines the very fabric of our society. By redistributing wealth through fair taxation, we can promote a more equitable society where everyone has the opportunity to succeed.
“As you've heard, many will argue that raising taxes on the wealthy will stifle economic growth and innovation. However, history has shown us time and time again that a strong and inclusive economy is built on a foundation of fairness and equality. When the wealthy pay their fair share it strengthens the middle class, boosts consumer spending, and stimulates economic activity to the benefit of all.
“In conclusion, raising taxes on the wealthiest 1% of taxpayers is not only a matter of economic necessity but also a moral imperative. It is about creating a more just and equitable society where everyone has the opportunity to thrive.”
“The gap between the rich and poor continues to widen due to decades of policies that have helped the rich get richer,” stated Senate bill sponsor Senator Melissa Murray. “We can’t keep balancing budgets by cutting vital social service programs that our most vulnerable citizens depend on. Revenue for RI creates an additional 3% surtax on income earned over $1 million. For example, a person making $1.1 million will pay an extra $3,000. A person making a million and a half dollars will pay an extra $15k, et cetera. This new surtax will only affect the top 2000 filers in Rhode Island, less than 1%, about 0.03%, and it will net an additional $126 million a year in new revenue. And now, while we're waiting for the fiscal note, we're hearing that it may be up to $180 million a year.
“This money will be put in a restricted account to be used for education, childcare, early child education, and repair and maintenance of roads and bridges. We know we need to properly fund our education formula and public schools for our state's children. We know that it's imperative that we expand childcare to families and also raise the wages of childcare workers, because finding quality, affordable childcare is difficult and is preventing families from working.
“As for our roads and bridges, that facet of this proposal didn't get much traction last year, but this year I don't think I need to explain why this funding is so crucial.
“In Rhode Island, the poorest families pay a much larger portion of their overall incomes in taxes as compared to the wealthiest Rhode Islanders. This makes life much harder for lower-income earners. When we rely on things like sales taxes, what we're doing is making our low- and middle-income families pay for a much larger share of the overall cost of running our state. Income tax equity is central to balancing out the unfair burden of the sales tax.
“Let's address the myth of millionaire flight. Millionaires move less often than the general public, and much less often than the poor. When folks are struggling, migration is a part of their survival strategy and their work search. People are more likely to move when things are not working out for them where they live. Migration is mostly about people who are struggling trying to find opportunities, not those who are cashing in on their successes. It's important to differentiate between travel and migration. There are two very different things and they're done by people in different economic markets. This proposal is about economic justice and equity. It assures that the richest Rhode Islanders pay their fair share. It helps to close the wealth gap by funding education and childcare expansion, which gets folks back to work. If we make infrastructure take a back seat to keeping taxes low for our wealthiest income earners, everyone will suffer. We can give serious consideration to this equitable and just proposal, or we can spend the upcoming years continuing to figuratively and literally dodging and filling potholes. Working families shouldn't bear more than their fair share of our state's burdens. It is time to pass Revenue for RI this year.”
“Rhode Island desperately needs additional state revenue to help families access reliable, affordable, and high-quality early care and education programs,” said Khadija Lewis Khan, Executive Director of the Beautiful Beginnings Child Care Center and a leader of the RIght from the Start Campaign. “Nine out of ten families in Rhode Island cannot afford the cost of child care, and there continues to be a statewide staffing crisis with many child care classrooms closed due to lack of staff. Many childcare programs cannot find qualified staff because they can only afford to pay wages that are a little bit above the minimum wage. Our state spends $46 million less in state general revenue on child care than in 2005. We must expand access for families and children, raise wages for childcare educators, and keep our commitment to pay rates at or above the federal equal access standards which we used to do before the childcare cuts. We urge passage of this important legislation so that the state can help more families access child care and early learning programs.”
“As the influx of federal dollars dries up, and local municipalities struggle to keep up with budget demands, the state must seek additional sources of revenue,” said Frank Flynn, President of the Rhode Island Federation of Teachers and Health Professionals. “By increasing the tax rate on income over one million dollars, Rhode Island will generate more than one hundred million much-needed dollars every year to support important priorities such as education, childcare, and infrastructure.”
“Our state budget and tax system ultimately are a reflection of our values as Rhode Islanders,” said Nina Harrison, Policy Director for the Economic Progress Institute. “We don’t think most Rhode Islanders support a tax system that is heavily skewed toward the highest-income earners, who pay a much lower percentage in taxes as a share of their annual income and skewed against the lowest 20%, who pay 13.3% of their income in state and local taxes. For the lowest-income earners, this ranks our state as the sixth worst in the country. We all know we can do much better.”
“This proposal is about creating a fairer tax system,” said Alan Krinsky, Director of Research and Fiscal Policy for the Economic Progress Institute. “Our state tax system should not make things worse by increasing inequality and the gap between those with the highest and those with the lowest incomes. The average income of a filer in the top 1% is 73 times the average income of someone in the lowest 20% before the collection of state and local taxes, and 77 times after! This millionaires’ surtax might not erase that increase in inequality but would narrow it.”
“Funding for infrastructure, childcare, public transportation, and education: these are all investments in business development and workforce development,” stated Kristina Contreras Fox, Director of Policy and Advocacy for the RI Black Business Association. “That's how the state uses its revenue to benefit everyone, not a select few. It's time for a real rising tide in the Ocean State. We need tax fairness now.”
To learn more about the Revenue for Rhode Islanders campaign, visit www.RevenueForRI.org.
Here’s the video:
While I strongly support the proposals discussed int he article, they clearly do not go far enough, and we have to place justice at the heart of our economic development process rather than leaving it as an after thought.
The data is very clear. Higher taxes on the rich are closely correlated with a stronger economy. recessions closely follow tax cuts for the rich as the greed driven economy that gives us tax cuts for the richest, regularly goes off the rails when they start to let greed rule and rules to protect the public disappear.