The rain has a way of sliding quietly down the high marble dome of the State House in June, a soft, persistent hum that backdrop-notes the scratch of a governor's pen. On June 12, 2026, Governor Dan McKee signed the $15-billion-plus Fiscal Year 2027 state budget, committing Rhode Island to a new, long-awaited relationship with its wealthiest residents. It is a courtship our state has avoided for sixteen years, keeping a flat 5.99% top income tax rate like an old, comfortable habit. But now, we have finally asked our millionaires to pay a little more.
(It is a slow dance, if you’re counting, phased in over three years.)
Almost immediately, the worried matchmakers began to whisper. On July 7, 2026, the Washington Post Editorial Board published an opinion piece warning Rhode Island that this new flame would end in tears. They pointed to neighboring Massachusetts as a cautionary tale of a suitor who packed his bags and fled the moment the bill arrived.
I've read this editorial three times, and it still won't tell me the truth about the ledger. The gossip, you see, has her math entirely wrong.
The Post argued that while Massachusetts raised "nearly $6 billion" over two years, it lost "over $4 billion in adjusted gross income" in a single year of outmigration. Stay with me here, because this is where the matchmaker's whispers turn to absolute fiction. She has committed a fundamental category error, confusing the suitor's entire net worth with the pocket money he actually spends.
Adjusted Gross Income (AGI) is not tax revenue. When the IRS reported in March 2026 that Massachusetts lost $4.18 billion in net AGI during the 2022–2023 tax year, it did not mean the state budget lost $4.18 billion. As first reported by The Boston Globe, those lost households did represent a real exit of wealth, but the actual tax revenue lost from that migrating income was roughly $209 million at the standard 5% rate. Even if we assume the maximum 9% tax rate applied to every single dollar—an impossibility—the loss would top out at $376 million.
Meanwhile, the actual new revenue generated by Massachusetts' Fair Share Amendment reached $6.2 billion in cumulative collections by early 2026. If we subtract the highest possible outmigration loss, the state netted a staggering surplus of well over $5.8 billion. The suitor did not bankrupt the household; he bought a brand-new estate.
Furthermore, the flight itself is a misunderstanding. IRS migration statistics reveal that net household outmigration in Massachusetts actually slowed down by 37% during the tax's first year, dropping from 26,001 households to 16,464. Independent policy analysts, including Evan Horowitz of the Center for State Policy Analysis at Tufts University, have pointed out that this migration is a post-pandemic trend sparked in 2020 by remote work and high housing costs, not tax avoidance.
In Rhode Island, our own courtship—championed by Representative Karen Alzate of Pawtucket under House Bill 2026-H 7127A—will phase in a 3% surtax on income over $1 million. Under a compromise brokered by House Speaker K. Joseph Shekarchi, the top marginal rate will climb gently: 6.99% in 2027, 7.99% in 2028, and 8.99% in 2029.
Local business-aligned watchdogs like the Rhode Island Public Expenditure Council (RIPEC) have echoed the Post's warnings, claiming the tax will destroy our competitive edge. Yet progressives and analysts at the Massachusetts Budget and Policy Center note that when wealthy residents move, their physical capital, local businesses, and economic footprint usually remain behind.
If Rhode Island is to dance this new dance, we should do so with our eyes wide open, ignoring the nervous matchmakers who cannot tell the difference between the fortune a suitor holds and the price of the ticket to stay.