Rhode Island Chooses Tax Hike Death Spiral

No matter how hard the politicians may wish and how much they bluster, there is simply no way to reverse this kind of death spiral by increasing tax rates.

S.T. Karnick | July 15, 2026

Rhode Island just enacted a tax increase that will chase the highest-earning households out of the state and ensure revenue shortfalls as long as it remains in place.

These millionaire taxes are an increasingly popular idea that benefits low-tax states while punishing everyone who remains stuck in high-tax ones.

Gov. Dan McKee on Friday signed a state budget that raises the tax rate on annual income above $1 million to 8.99 percent, up from the current 5.99 percent. That is a 50 percent tax hike on the state’s most successful people.

McKee, a Democrat, is up for reelection this year and is in a tough primary battle against wealthy opponent Helena Foulkes. That explains his support for a monster tax increase he opposed last year.

I am by no means convinced that all these governors and state legislators really believe that these tax hikes will raise additional money. Some dimwitted true believers certainly do imagine that people are so enamored of their current places of residence that they will accept anything as the price of remaining there. New York City mayor Zohran Mamdani, Los Angeles political boss Karen Bass, and Seattle chief executive Katie Wilson are apparently among these.

At a news conference early this month, Wilson “laughed off warnings of a millionaire exodus even as a new survey shows........

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