STATE HOUSE – State Representative Doreen Costa (R-North Kingstown, Exeter) said today she will introduce a bill to eliminate the estate tax in Rhode Island.
Costa’s bill is part of the House Republican’s “Getting to 25” program, which aims to bring Rhode Island back into the mainstream. The estate tax is yet another case where Rhode Island is considered uncompetitive. Most of states tie estate taxes to the federal level, where estates below $5.25 million (for tax year 2013) are not subject to estate tax.
Several proposals to change the estate tax have already been introduced this legislative session. Last session, there were nine bills calling for a change to the estate tax in Rhode Island, none reached the House Floor for a vote.
“Rhode Island has one of the most unfriendly estate tax thresholds in the country.” said Costa. Currently, the threshold limit is $921,000, but is linked to inflation. “Only one state has a lower threshold amount than Rhode Island and that is New Jersey. We need to take action this year.”
Forbes magazine listed Rhode Island as one of ten states “where not to die in 2013.” “With our beautiful coast, high quality healthcare system, and recreational opportunities, we should be showcasing our state, enticing people to stay. Instead Rhode Island laws convince people to leave.”
Costa’s bill comes on the heels of a special report issued by the RI Department of Revenue. This report tracked the outflow of income tax filers in Rhode Island from 2007 to 2011. During this period the state experienced “a net loss of 741” filers reporting incomes above $200,000.
“Some have used this study to defend estate taxes in Rhode Island by claiming there was ‘no mass exodus’ from the state. However, based on the state’s own report, the fact is clear; Rhode Island lost high income earners. We are going the wrong way.”
“When people leave Rhode Island, everyone gets hurt. My bill will cost money, but consider how our state is losing this population.” On average these 700 residents paid over $20,000 in taxes each year. Rhode Island lost an estimated $14 million in income tax collections from the flight of these residents, almost half of the expected $31.8 million collected annually by the state. “Some will say that Rhode Island cannot afford to eliminate the estate tax, I ask, can we afford not to take action?”
For more information, contact:
Jeffrey Robert, House Minority Office
State House Room 106
Providence, RI 02903
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