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R.I. considers taxing the rich to help offset federal cuts

The Rhode Island Get Rhode Map A weekday briefing from veteran Rhode Island reporters, focused on the things that matter most in the Ocean State. Enter Email Sign Up Representative Karen Alzate, the Pawtucket Democrat sponsoring the House version of the bill, stood on the State House steps, leading the rally in a chant of 'Tax the rich!' Advertisement 'This is the year to do it,' Alzate said. 'We can no longer wait until next year. We're seeing what's coming out of Washington. And it is important that we get ahead of it before they come for us.' Behind her a countdown clock ticked down, estimating that there were 20 days and 1 hour left in this year's legislative session. " This session is almost over," Alzate said. 'This is our last chance to do something right and let them know that we are done waiting.' The bill would take effect on Jan. 1, 2026. Advertisement Top legislators have said the Assembly might need But Alisha Pina, coordinator of the Revenue for Rhode Islanders coalition, said, 'We need our legislators to be proactive, not reactive. We don't want you to come back in the fall and consider it then. We want you to consider it now.' Pina said Massachusetts is using revenue from the rich for priorities such as child care, roads, bridges, and public transit. And she said Rhode Island has needs of its own. 'We've got a bridge that you can walk over faster,' she said, referring to Senator Melissa A. Murray, the Woonsocket Democrat who introduced the Senator Melissa A. Murray, a Woonsocket Democrat, speaks in favor of her bill to raise the income tax rate on the top 1 percent of Rhode Islanders. Edward Fitzpatrick " What could we do with $190 million?" Murray asked during the rally. 'We could fully fund our public schools. We could pay for meals for our kids in schools. We could pay for mental health supports for kids in school. We could bolster health care. We could lift children out of poverty. We could restore the cuts to pensions. We could slash the tax on Social Security.' But during the Senate Finance Committee hearing, Jason Martiesian said the Rhode Island Business Coalition opposes the proposal. He described Massachusetts as 'an outlier' nationally, and said 20 states have lowered their top incomes tax rates since 2020. Advertisement 'We think it's important to get a broader context,' Martiesian said. 'Since COVID, businesses and people can work anywhere. So it's important, we believe, that Rhode Island sets up a measure of attracting businesses and workers so that we can grow our economy, provide more tax revenue and services.' Marc Perlman, CEO of Ocean State Job Lot, said the company formed 48 years ago with three people who had zero take-home pay. 'We put everything back in the business,' he said, and the company became deeply involved with philanthropy. Today, he said, 'We have 1,500 Rhode Island families that depend on us.' But, he said, 'We couldn't do this if we weren't a pass-through organization. We couldn't invest back into our company.' A pass-through entity is a legal business structure that is not subject to corporate income tax because it passes profits onto the owners. Perlman said business people can find more favorable tax environments in states such as Florida. 'Even our former governors have left the state,' he said. '(Donald) Carcieri is in New Hampshire, (Philip) Noel is in Florida. I don't know where Gina (Raimondo) is, but they're not here.' Melissa Travis, chairwoman of the Rhode Island Business Leaders Alliance, objected to the bill, and said, " This doesn't target the wealthy. It's targeting the Main Street business owners. It would increase their taxes substantially." But Alan Krinsky, director of research and fiscal policy at the Economic Progress Institute, said opponents are presenting " misleading information" about the bill's impact. He said about 90 percent of those who claim pass-through income are not in the top 1 percent and will remain unaffected by the proposed tax. Advertisement 'Any suggestion that this bill would directly affect most or even a large majority of small and micro business owners is inaccurate,' Krinsky said. During the rally, speakers said new revenue is needed to plug a state budget deficit of up to $200 million. And they noted Governor Daniel J. McKee " I think it's only fair that those at the very top should share the burden that the rest of us have all the years,' said Tommy Cute, a bus driver who is about to retire after 45 years at RIPTA. 'It's only fair that they pitch in and contribute more to run these operations and to save RIPTA.' The Senate bill to tax the rich is cosponsored by new Senate President Valerie A. Lawson, an East Providence Democrat, and new Senate Majority Leader Frank A. Ciccone III, a Providence Democrat. When asked on Thursday for his stance on the bill, House Speaker K. Joseph Shekarchi, a Warwick Democrat, said legislators have 'no shortage of meritorious proposals that affect state resources' as the session enters its final weeks. 'The magnitude of the uncertainty of the federal funding picture and the numerous holes in the governor's proposed budget complicate both balancing this year's budget and planning for the unknown,' Shekarchi said. 'I continue to keep many options on the table for this challenging task.' The Senate Finance Committee voted to hold the bill for further study. Advertisement Edward Fitzpatrick can be reached at