Creates an additional Rhode Island personal income surtax of 3% on taxable income over $1,000,000, with the existing three-bracket personal income tax structure remaining in place.
Impact
The bill's implementation is expected to significantly affect high-income earners, specifically targeting millionaires. The funds generated from this surtax are earmarked for essential services such as affordable childcare, quality public education, and public transportation improvements. This aligns with broader state objectives to enhance economic opportunities and support essential infrastructure, benefitting the community as a whole. Additionally, the bill mandates annual reporting on the revenue collected and its allocation to ensure transparency in the use of generated funds.
Summary
House Bill H7338 proposes the introduction of a personal income surtax of three percent on individuals with taxable income exceeding one million dollars annually. This surtax is intended to supplement the existing three-bracket personal income tax structure in Rhode Island, and it would apply to the income after deductions and exemptions have been calculated. This measure aims to address wealth inequalities and generate additional revenue for critical state services.
Contention
Discussions surrounding H7338 likely center on the balance between equity in taxation and the potential pushback from affluent constituents who may view this surtax as burdensome. Supporters argue that the surtax is a necessary step toward financial equity and robust investment in public services, while opponents might claim it could discourage high earners from residing or investing in the state. The dialogue reflects broader national conversations about wealth distribution and state taxation policies.