Costa Bill Would Eliiminate Estate Tax Threshold

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?”