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 introduction of this surtax is expected to impact high-income earners significantly while potentially providing necessary revenue for improving public services in the state. Advocates for the bill argue that it will contribute to a fairer tax system whereby the wealthiest individuals contribute more to state resources, which can enhance infrastructure and education systems. However, opponents might argue that increasing taxes on higher income can discourage economic activity and investment from wealthy individuals and businesses, thereby affecting the overall economic climate of the state.
Summary
Bill S2355 proposes the introduction of a personal income surtax of three percent (3%) on taxable income exceeding one million dollars ($1,000,000) for Rhode Island residents. This surtax is set to take effect on January 1, 2025, and will be an addition to the existing three-bracket personal income tax system currently in place. The revenue generated from this surtax is intended to be allocated towards various essential state services, including affordable child care, public education, public colleges, and maintenance of infrastructure such as roads and bridges.
Contention
Discussions around S2355 may center on the balance between equity in taxation and the potential economic ramifications of such a surtax. Proponents are likely to highlight the need for funding public programs that benefit all residents and address systemic inequities, while detractors may raise concerns about how this change might affect business investments and high-income residents' decisions to remain in Rhode Island.