This report presents a point-in-time analysis of Rhode Island’s Personal Income Tax by applying 2006 tax laws to today’s incomes and comparing them to current 2026 tax rules. Using microsimulation data from the Institute on Taxation and Economic Policy (ITEP), the analysis shows that Rhode Island would collect approximately $590 million more in Personal Income Tax revenue in a single year if the 2006 tax structure were still in place.
The findings demonstrate that tax changes over the past two decades—including the introduction and reduction of the flat tax and the shift from a five-bracket system with a top rate of 9.90 percent to today’s three-bracket system with a top rate of 5.99 percent—have disproportionately benefited the highest-income filers while steadily draining state revenue. The report concludes that these changes have likely cost Rhode Island billions of dollars over time, limiting the state’s ability to invest in healthcare, childcare, public transit, education, and other programs that strengthen economic stability and quality of life.