On Friday it was reported in the Providence Journal that Speaker Mattiello’s budget priorities include reducing the estate tax by increasing the threshold for paying the tax from $1.5 to $2 million at an estimated cost of $4.3 million, as well reducing the corporate minimum tax from $450 to $400 at an estimated cost of $3.2 million. Reducing the estate tax and corporate minimum tax will provide little benefit to the overwhelming majority of Rhode Islanders and are not a good use of public funds.
“We hope that lawmakers will not reduce state revenues by over $7 million for tax changes that would benefit a handful of Rhode Islanders and businesses,” said Rachel Flum, Executive Director. “There are many wiser ways to use $6 million to support thousands of working Rhode Islander and to ensure that businesses have the workforce they need to succeed.”
-2The state increased the estate tax threshold in 2014 effective January 2015, essentially increasing estates exempt from paying the tax from $1 million to $1.5 million and reducing the tax on higher income estates. The estimated revenue from the estate tax in 2014 was $43.6 million, dropping to $34.2 million in 2015, a 20% loss of revenue after the change.
Further increasing the exemption to $2 million would benefit approximately 100 estates, of which 35 would not have to pay any tax at all.