As many Rhode Islanders are lining up to pay their taxes, Cranston Mayor Allan Fung rolled out his tax reform plan if he is elected governor.
"Our top priority will be providing tax relief that will allow businesses to thrive in the State of Rhode Island just as we did in the City of Cranston," said Fung.
Fung said he plans to overhaul the tax system instead of simply focusing on one specific tax. His plan, which he says will reduce taxes by $200 million, looks at the corporate tax, the estate tax, and the sales tax.
Fung says he will lower the corporate tax to 6.5% making it the lowest in the Northeast. He said if that proves to be a success over the following three years he will lower the tax incrementally with the possibility of the corporate tax being lowered to 5% in fiscal year 19. Based on the projected revenue for 2015, this cut will cost $35 million on fiscal year 16 but bring in $133,200,000 in revenue.
When it comes to the estate tax Fung says he plans to have Rhode Island match the federal exemption. Currently RI's estate tax exemption is at $921,655. The federal exemption is $5,250,000. This tax cut would cost roughly $31 million in fiscal year 2016.
As for the sales tax Fung says he plans to lower the sales tax to 6.25% in order to match the tax in neighboring Massachusetts. If this proves successful Fung said he will look to lower the tax to 6% in the second year, 5.75% in the third year and possibly to as low as 5.5% in four years. He estimates this could bring in $930 million in revenue and based on the projected revenue cost roughly $120 million.
Lastly, Fung plans to lower the minimum corporate to $250 in his first budget. If that is successful he would consider lowering the tax incrementally over the next three years to $150 in fiscal year 2017, $100 in fiscal year 18, and as low as $50 in fiscal year 19.
"For far too long, our government has treated business owners as ATM's. It is now time for us to create an environment for them so that they may prosper and get more Rhode Islanders back to work," said Fung. He said he hopes his tax plan will speak to businessmen and woman and let them know that "Rhode Island is open for business."
Fung is facing off in a primary against Republican Ken Block in September.