What is the Rhode Island estate tax? RI General Law 44-22-1 states, " A tax is imposed upon the transfer of the net estate of every resident or nonresident decedent as a tax upon the right to transfer."
In other words, when anyone who owns property in RI dies, a tax is applied on the value of their estate and is paid by the inheritors of that property.
The full Rhode Island General Laws Chapter 44-22, 23, and 24 provides full
details on the computation of the tax.
Rhode Island collects approximately $30 million from the estate tax this year but we lose $113 million in lost state and local taxes from people moving out of the state. We don't suggest that every person moving out of our state does so because of the death tax, but those who do move because of this punitive tax may take with them job producing companies and/or investment capital further harming our economy.
Financial planners who provide management services to those with wealth have reported that over half of their clients who have moved out of Rhode Island did so primarily because of the estate tax.
Is the Death Tax penny wise and pound foolish?
Census data shows that over 124,000 residents left Rhode Island between 1991 and 2013, an equivalent of 1 in 10 current residents.
IRS data shows that a compounded $7.1 billion in net income left our state between 1995 and 2009.
Compounding this loss over the 13 years examined in the report, Rhode Island has lost 1.5 billion dollars in state and local taxes.
How much of this could be retained if we didn't push our most wealthy, those who produce jobs and capital investment, out of Rhode Island?
What the experts say... 'It is borderline malpractice NOT to tell my clients to leave the state' - anonymous financial planner
The State of Connecticut survey of financial planners showed that 52% of clients who moved did so primarily because of the estate tax and 76% partially due to the tax.
A survey of Rhode Island financial planners found that 58% of clients who moved did so primarily because of the estate tax and 74% partially due to the tax.
What does this exodus cost our state?The total net income leaving Rhode Island compounded over the years studied amounts to 7.1 billion dollars. This loss equates to $1.5 billion in state and local taxes lost due to this out-migration.