The GPCC, Joined by Business Groups Statewide, Announces Opposition to Millionaire Tax
.jpg "The GPCC, Joined by Business Groups Statewide, Announces Opposition to Millionaire Tax")
Urge General Assembly to Further Study Issue in Wake of Massachusetts Revenue Loss
The Greater Providence Chamber of Commerce (GPCC) has partnered with the state’s leading business organizations – representing some 5,000 members and tens of thousands of employees combined – to announce it is calling on the General Assembly to pause consideration of a proposed millionaire tax, warning that the measure could undermine investment, job creation, and long-term competitiveness.
The announcement was made today by Laurie White, president of the GPCC at its annual Legislative Luncheon. Partners in the education and advocacy campaign include the Rhode Island Public Expenditure Council (RIPEC), the Rhode Island Manufacturing Association, the Northern Rhode Island Chamber of Commerce, the Greater Newport Chamber of Commerce, Associated General Contractors, the Business Coalition and the Providence Foundation.
In making the announcement, White said, “Instituting the millionaire’s tax would send the absolute wrong signal. Rhode Island should be working to retain employers and attract new investment—not create more uncertainty. We cannot afford to ignore the warning signs from other states, including our closest neighbor to the north. When businesses leave, revenue leaves with them. And when businesses choose not to come, the jobs and tax revenue never come at all.”
She continued, “Many of the individuals impacted by this proposal are not just high-income earners – they are job creators, small business owners and investors who fuel our economy. If we want a healthy, thriving Rhode Island, we need to focus on growth, competitiveness, and stability. Pause this proposal, study the facts, and get it right—because we all want a healthy, thriving Rhode Island.”
The Chamber and its partners highlighted several key concerns:
Impact on Small Business: The Governor’s proposed budget article would significantly impact the Rhode Island small business community, the backbone of the state’s economy. Importantly, many small businesses are structured in a way whereby personal income taxes directly affect business operations, hiring and expansion.
“Many small businesses operate as pass through entities including partnerships, S-Corporations and LLC’s,” White continued “These are small, self-made, family businesses that dominate our state’s landscape and who would be unnecessarily and perhaps unintendedly harmed by this legislation. This increased tax burden would jeopardize reinvestment in the business, expansion and new job creation.”
Outmigration Risks: States that have implemented similar taxes, including Massachusetts have experienced an outflow of high-income residents, resulting in reduced overall tax revenue over time. Said White, “We do not have to guess. In Massachusetts, billions in income have left the state, driven largely by high earners. That means lost jobs, lost investment, and lost revenue.”
“Across the country, nearly half of states have reduced their income tax rates in recent years to become more competitive and support growth, while only a small handful have increased their tax rates, noted Michael DiBiase, RIPEC President and CEO. “The proposed millionaire’s tax would be a step in the wrong direction and would only weaken the economic outlook for Rhode Island, already struggling with outmigration, slow GDP growth, and an uncompetitive tax structure.”
Economic Competitiveness: At a time when states are competing for talent and investment, higher taxes may place Rhode Island at risk. Right now, Rhode Island enjoys a competitive advantage over Massachusetts.
Impact on the Everyday Millionaires: Not all millionaires fit a stereotype. Recent retirees who have saved their entire lives and now wish to sell a large home or cash in retirement accounts may now qualify as millionaires and be taxed at this higher rate.
“This is, without question, an issue of statewide importance but we have considerable concern on what the imposition of such a tax would have on the fabric of the Aquidneck Island community, comprised largely of small businesses and families who have lived and worked here for generations,” said Erin Donovan-Boyle, executive director of the Greater Newport Chamber of Commerce. “We need not look any farther than to the vibrancy of our hospitality and tourism industry to understand that any attempts to burden a small segment of our population largely responsible for this tourism revenue would be devastating to the area – adversely impacting both the industry and its workforce.”
The Chamber and its partners in closing urged policy makers to consider alternative approaches to revenue generation and budget management that promote economic expansion while maintaining a competitive business climate. “This is a high-risk decision. We should not rush it. Budget Article 5 is a major policy shift with real economic consequences. Moving forward without fully understanding the impact is a mistake Rhode Island may not be able to undo.”
