by Joseph Henchman
Tax Foundation
June 19, 2012
The key income tax reform accomplishment during the recent recession occurred in Rhode Island. Beginning in 2006, an optional flat tax was introduced to parallel the regular income tax, and continued bipartisan pressure to do something about Rhode Island’s poor economic performance and tax system complexity led to further reform in 2010. Elements of the reform include elimination of the optional flat tax and alternative minimum tax, reduction of tax credits, increasing the standard tax deduction for taxpayers, and elimination of itemized deductions. Overall, the reform was designed to be revenue-neutral and actually increase progressivity, while dramatically reducing compliance costs and barriers to economic growth. Rhode Island’s tax reform will greatly boost the state’s competitive position. Proposals are increasingly popping up across the country in Maine, Georgia, Arizona, Kansas and South Carolina.

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