Costa Bill Would Eliiminate Estate Tax Threshold

Current threshold is $921,000.

State Rep. Doreen Costa yesterday announced she will  introduce a bill that would eliminate the estate tax threshold of $921,000 in Rhode Island.

The bill is part of the House Republican's "getting to 24" program, which members say is a goal to get Rhode Island to at least the halfway mark in national rankings of leading indicators. Today, Rhode Island ranks towards the bottom in most.

“Rhode Island has one of the most unfriendly estate tax thresholds in the country.” said Costa.  Currently, the threshold limit is $921,000, but is linked to inflation.  “Only one state has a lower threshold amount than Rhode Island and that is New Jersey.  We need to take action this year.”

Costa, in a release, said Rhode Island is listed by Forbes as one of the states "not to die in 2013" because of the estate tax. The state Department of Revenue reportedly lost 741 tax filers from 2007 to 2011 with incomes above $200,000.

Costa said some have used that study to say that there hasn't been a mass exodus of wealthier Rhode Islanders due to the estate tax. 

“When people leave Rhode Island, everyone gets hurt.  My bill will cost money, but consider how our state is losing this population," Costa said. "On average these 700 residents paid over $20,000 in taxes each year. Rhode Island lost an estimated $14 million in income tax collections from the flight of these residents, almost half of the expected $31.8 million collected annually by the state. Some will say that Rhode Island cannot afford to eliminate the estate tax, I ask, can we afford not to take action?”

NK Parent February 27, 2014 at 04:14 PM
Maybe I'm missing something but Costa seems to be making a huge leap of faith with her statistics. How many of these 741 lost tax filers left directly because of the higher estate tax? How many of them left due to loss of job or other factors such as weather? She seems to be erroneously making the assumption that they all would have stayed in RI if the estate tax threshold was higher or repealed entirely.
Jim February 28, 2014 at 09:33 AM
Good point....many leave because of the RI State income tax along with other high taxes. We need to start to reduce taxes and the estate tax would be a great start. This will be difficult unless we cut spending and stop foolish projects like the North Kingstown train station garage that cost $56,000 a month for 300 riders a day.
Linda Gustafson February 28, 2014 at 11:19 AM
RI has wonderful geography and we should be attracting people to this beautiful state by creating tax friendly policies, one of which is to eliminate the estate tax entirely or placing the threshold at the federal level. This is an opportunity for economic development. Think big-not small!


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