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Coalition of Business Groups Announce Opposition to Shekarchi’s Possible Tax Increase
Coalition of Business Groups Announce Opposition to Shekarchi’s Possible Tax Increase
Friday, January 10, 2025
This past week, Speaker of the House Joe Shekarchi said that the legislature may consider raising taxes on Rhode Islanders.
On Friday afternoon, a group of pro-business groups announced their opposition to any proposed tax increase.
Presently, the state is facing a $300 million deficit.
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In the letter signed by eleven groups, the coalition wrote, “[We are] writing on behalf of an extensive array of business advocacy organizations to express our strong opposition to any broad-based tax increases, particularly to Rhode Island’s personal income tax rates. Our voices will be expressed through a channel called the Rhode Island Business Competitiveness Initiative and is indicative of the views of thousands of local businesses.”
The letter was addressed to both Shekarchi and Senate President Dominick Ruggerio.
Earlier on Friday, the Rhode Island Public Expenditure Council issued a report critical of Governor Dan McKee and the legislature's use of one-time funds to support reoccurring costs.
“Increasing the personal income tax rate would have a significant, long-term negative impact on our economy. Rhode Island is already in a fierce competition with neighboring states to attract and retain businesses, residents and talent. Such short-sighted action would produce a chilling effect on our overall competitiveness. This is particularly concerning as Rhode Island is making notable investments to expand high-wage industry sectors, including life sciences and technology,” the coalition added.
The coalition highlighted that Rhode Island does have some tax advantages over Massachusetts. “Currently, we have some advantages over Massachusetts, including a 1% lower corporate tax rate, a 24% lower cost of living than Boston, and a lower personal income tax rate on high earners. We need to build on these advantages, not eliminate them. A personal income tax increase would exacerbate the challenges we face in retaining high-income earners and entrepreneurs who drive economic growth and create jobs in our state,” wrote the coalition.
"The great majority of businesses in Rhode Island, and nearly all small businesses, report their profits through the personal income tax rather than the corporate tax. Moreover, businesses rely on talented professionals who are drawn to competitive, affordable states. Increasing the tax burden would discourage individuals from choosing Rhode Island as their home, ultimately impacting innovation and job creation. Higher taxes would send a message that Rhode Island is not serious about improving its business climate. Companies considering expansion or relocation weigh the overall tax burden heavily in their decisions, and a hike in the personal income tax would significantly diminish our appeal."
Here is the list of those signing the letter:
Farouk Rajab, President, Rhode Island Hospitality Association
Melissa Travis, President, Rhode Island Society of CPAs
John Simmons, President, Rhode Island Business Coalition
Molly Donohue Magee, Chief Executive Officer, SENEDIA
Scott Bromberg, President, Rhode Island Food Dealers Association
Dave Chenevert, Executive Director, Rhode Island Manufacturers Association
Rhode Island Retail Federation Membership
Laurie White, President, Greater Providence Chamber of Commerce
Elizabeth Catucci, President, Northern Rhode Island Chamber of Commerce
Erin Donovan Boyle, President, Greater Newport Chamber of Commerce
Michael DiBiase, President, Rhode Island Public Expenditure Council
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