In the face of federal cuts and rising prices, Rhode Island Governor Daniel McKee has proposed that all Social Security benefits be exempt from state taxation. While this might seem like a move that can help equalize income, that might not be the case. At face value, exempting Social Security benefits from taxation seems like the best way to aid those who use it as their primary or only source of income.
However, there is data to prove the contrary.
To begin with, Rhode Island already exempts benefits from taxation for those with the lowest incomes. In 2025, the state announced that benefits would not be taxed for those whose taxable income is $107,000 or lower. The number was a little higher for married couples filing jointly. Married couples who were filing their taxes together had a limit of $133,750…