As McKee and Foulkes Push for Higher Taxes, One Republican Leader Proposes Cuts

As McKee and Foulkes Push for Higher Taxes, One Republican Leader Proposes Cuts

Governor Dan McKee’s budget proposes a “millionaire tax” to increase revenue. And this week, Democratic gubernatorial candidate Helena Foulkes proposed a tax to fund new housing— she claims it will raise $1 billion.

But on Tuesday, Senate Minority Leader Jessica de la Cruz (R-Dist. 23, North Smithfield, Burrillville, Glocester) introduced her legislation (S-2672) to establish a phased reduction of personal state income tax rates.

The legislation reduces personal income tax rates by two percent each year for five years, beginning January 1, 2027. It also provides for a legislative review process to determine the fiscal impact of the phased rate reductions and to observe taxpayer behavior and economic trends. This reform is a major across-the-board tax cut for all Rhode Islanders.

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de la Cruz said the legislation is critical to make Rhode Island competitive.

“RI is currently ranked 30th in the nation for our top marginal income tax rate. We declined from 25th in 2020 to 30th in 2025 because other states have reduced their top tax rates. If we pass the so-called ‘Millionaire’s Tax,’ Rhode Island would plunge to 44th in national competitiveness. We should instead champion tax policies that increase household disposable income, support business and economic growth, and require government spending to be reined in – this bill will do that,” said de la Cruz.

Her proposal has garnered support. Senate Democratic Whip is one of the co-sponsors, and some business groups support the initiative.

“In a small state like Rhode Island, even modest changes in tax policy can influence where businesses choose to grow. When we become more competitive, we attract and retain the investment that leads to a vibrant economy overall,” said Laurie White of the Greater Providence Chamber of Commerce. “We applaud Senator Jessica de la Cruz, her leadership team, and her legislative colleagues on both sides of the aisle for embracing the business community’s affordability agenda for all Rhode Islanders.”

It is not the only reform she thinks is critical to improve Rhode Island’s economy.

“I have said over and over that RI does not have a revenue problem; it has a spending problem. Our caucus has continually introduced legislation to cut expenditures. An Office of Inspector General to combat waste, fraud, and abuse, Zero-Based Budgeting to curtail legacy spending, and a Line Item Veto to allow greater discretion in approving budgets are all common-sense legislation that, if enacted, would more than make up for this relatively nominal tax cut,” added de la Cruz.