Lt. Governor Candidate Loughlin Opposes Rhode Island’s Proposed “Millionaire's Tax”

Lt. Governor Candidate Loughlin Opposes Rhode Island’s Proposed “Millionaire's Tax”

 

Republican candidate for Lieutenant Governor John Loughlin on Monday slammed the proposed 3% surtax on incomes over $1 million – embraced by both Democratic gubernatorial candidates – as a proven job-killing, wealth-repelling mistake.

Citing hard IRS migration data from Massachusetts and New York, Loughlin warned that Rhode Island cannot afford to repeat the fiscal self-sabotage of its high-tax neighbors.

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“Rhode Island doesn’t need fewer millionaires – we need more,” said Loughlin.

Loughlin joins the Greater Providence Chamber of Commerce and the Rhode Island Public Expenditure Council in opposition to the proposed tax.

“Both Democratic candidates for governor  (Governor Dan McKee and Helena Foulkes) want to chase away the very people who create jobs, fund our schools, and support our charities. Massachusetts lost $4.2 billion in adjusted gross income in 2023 alone after enacting its 4% millionaire surtax – an 8% increase in income outflow from the prior year, with top earners accounting for roughly 70% of the lost revenue. New York lost nearly $10 billion in taxable income in 2022 as high earners fled to lower-tax states. We’ve seen this movie before, and it ends with shrinking tax bases, fewer jobs, and higher burdens on working families,” Loughlin said.

Loughlin pointed to IRS state-to-state migration statistics showing that high-income households are driving the bulk of these outflows. In Massachusetts, the first full year of the surtax saw higher-income filers ($200,000+) responsible for a disproportionate share of the $4.2 billion net AGI loss, even as overall out-migration numbers remained high.

New York’s pattern has been consistent: hundreds of thousands of residents – disproportionately higher earners – have left, draining billions in taxable income annually. These are not abstract numbers; they represent real jobs, real investment, and real charitable giving that Rhode Island desperately needs.

“Tax-and-spend policies don’t create prosperity – they chase it away,” Loughlin continued.

“Instead of punishing success, Rhode Island should roll out the red carpet for wealth creators, entrepreneurs, and pass-through businesses that drive our economy.”

 

Loughlin’s Pro-Growth Alternative: A “Millionaire Magnet” Agenda

Rather than a punitive tax hike that would raise Rhode Island’s top marginal rate to nearly 9%, Loughlin proposed two targeted, pro-growth incentives designed to attract millionaires and the pass-through entities (S-corps, LLCs, and partnerships) that employ tens of thousands of Rhode Islanders. Loughlin proposes:

 

Per-Job Tax Credits for Pass-Through Entities: Offer generous, refundable state tax credits to pass-through businesses based on the number of full-time jobs created or maintained in Rhode Island. These credits would be scaled to reward companies that hire locally, invest in workforce training, and expand operations here – turning pass-through owners into partners in job growth rather than targets for higher taxes.

 

More Generous Charitable Giving Deductions: Significantly expand state-level deductions and introduce targeted tax credits for charitable contributions, especially to Rhode Island-based nonprofits, education, and community organizations. This would make Rhode Island one of the most attractive states in the Northeast for philanthropically minded high-net-worth individuals and families, boosting private-sector support for causes that government alone cannot fund

 

“These incentives are simple, targeted, and proven to work in competitive states,” Loughlin said. “We can learn from the mistakes of Massachusetts and New York and instead become the Northeast’s destination for success. More millionaires mean more jobs, more opportunity, and a stronger tax base for all Rhode Islanders.”

Loughlin said that, if elected Lieutenant Governor, he will work with the General Assembly to enact these reforms immediately and block any version of the millionaire’s tax.

“Rhode Island’s future depends on choosing growth over envy,” Loughlin concluded. “Let’s stop driving talent and capital to Florida, Texas, and New Hampshire – and start bringing it home to the Ocean State.”