Governor McKee’s income tax hike proposal went before the House Committee on Finance this past Tuesday. The proposal creates an 8.9% income tax bracket for income over $1 million, a so-called millionaires tax.

NFIB testified in opposition to Article 5 Section 6 of the Governor’s FY27 budget, the vehicle for his tax hike plan. NFIB reminded lawmakers that the vast majority of small businesses file their taxes as pass-through entities and could be subjected to the higher tax rate. In the testimony NFIB told committee members that this is not simply income pocketed by businesses owners but rather money reinvested in the business through capitol improvements, facility upgrades, new equipment, and growing their workforce.

This tax hike may also impact an owner’s ability to retire. Unlike elected officials who often have generous pensions, small business owners rely on the sale of their business to comfortably retire. Taxing their retirement nest egg at a higher rate will unfairly penalize Rhode Island employers who spent a lifetime growing and operating a small business in Rhode Island.

If you have not already done so, please take a moment to contact the House Committee on Finance and voice your opposition to this proposal using NFIB’s current Action Alert.