‘Taylor Swift Tax’ Stirs Bad Blood With Rhode Island Homeowners

**SPEAKER_1** (0:02)
Bloomberg Audio Studios, Podcasts, Radio, News.

**SPEAKER_2** (0:08)
You're listening to Bloomberg Businessweek with Carol Massar and Tim Stenovec on Bloomberg Radio.

**Tim Stenovec** (0:14)
Let's talk a little bit about Taylor Swift because everybody is talking about this wedding.

**Norah Mulinda** (0:19)
They are.

**Tim Stenovec** (0:19)
That is supposedly happening this weekend at Madison Square Garden. But the Bloomberg audience knows that's not the most important thing to be focused on.
Especially if you live in Rhode Island.

**Norah Mulinda** (0:30)
This is very true because we also have what they're calling the Taylor Swift Tax.

**Tim Stenovec** (0:35)
Greg Ryan writes all about it. Greg joins us from Boston. He's Bloomberg News Boston Money and Power reporter. Greg, good to have you on the program. This is a most read story on the Bloomberg Terminal and for very good reason. It's not just the headline that is amazing. The entire story is amazing. Taylor Swift taxter is bad blood with Rhode Island homeowners. What is the so-called Taylor Swift tax?

**Greg Ryan** (0:59)
The tax is an annual property tax on second homes in Rhode Island that are valued over $1 million. It's half a percentage point and it was passed last year as part of the state budget. The purpose is to raise money to build more affordable housing in Rhode Island.

**Tim Stenovec** (1:14)
It seems like a relatively small amount. The reason I bring that up is just for the Taylor Swift example. She has a 12,700 square foot mansion. It's assessed at $28 million.
That means an extra tax bill of about $136,000. That's not that much for her given the value of the home. How is it affecting the people at the lower end of the income and fame spectrum?

**Greg Ryan** (1:44)
Yeah, it's interesting. The loudest protests here are not coming from those who own mega mansions next to Taylor's and Watch Hill. It's really coming from these homeowners who have had modest properties, modest vacation homes in their family for generations, often three or four generations, who are going to be seeing their tax bills going up by 50 percent or more with this Taylor Swift tax. A lot of these homes, you can't stay in them or you can't rent them out during the winter and parts of the spring or the fall because they're not insulated or they don't have heating.
So considering even if people wanted to rent them out to try to make some money to make up for this tax, they really have a small window to do so in the summer.

**Norah Mulinda** (2:29)
I just find it being interesting that the loudest protests aren't necessarily coming from the billionaires like Taylor Swift, but those who have those vacation homes there. How long has this really been a contentious issue in the area, or have we really been seeing this more highlighted as of late?

**Greg Ryan** (2:45)
Yeah, it's interesting. The tax was enacted, as I said, as part of the state budget about a year ago, but it's really only gotten on people's radars in the past few weeks. The state sent out notices to those who may be subject to the tax in May, sent about 8,000 notices. As people have arrived to their summer homes on the coast, conversations have started.
It's really only been in the past few weeks that there's been an uproar about this. And actually now, there's a law firm in Providence is organizing a lawsuit. They're hearing from these unhappy homeowners who want to challenge this tax and court saying it's unconstitutional. So there may be legal action coming in the next few weeks.

**Tim Stenovec** (3:26)
Greg, you make the point in your piece, and it's a really important one, that this is not occurring in a vacuum. The challenge is that it's trying to address, I have to do with affordable housing, that's affecting pretty much every state in the country right now. But it's also part of a pattern of leaders in democratic states of introducing taxes to try to supplement affordable housing or try to tax those at the most upper ends of the income spectrum. So it makes me think of what's happening here in New York with Zoran Mondomini pushing through his second home tax. We just spoke about Ken Griffin and what he's doing in Miami right now and the buying of basically that entire building. We just spoke about that a few minutes ago.
What does this signify to you in this moment of time?

**Greg Ryan** (4:16)
There's a lot of voter anger around wealth inequality, around affordability, that's maybe the big buzzword this midterm season is affordability. So yes, you did see that second home tax also taking effect this week in New York. You're seeing more and more states looking at millionaire taxes, actually Rhode Island just last month enacted its millionaires tax. Massachusetts, Maine, Washington State, they all have millionaire taxes. So yeah, Democrats, their Democratic leaders are saying, look, we're facing a budget crunch, they're blaming Trump and federal funding cuts in DC, and they're looking toward the wealthy to make up some of that gap.