R.I. income inequality 19th highest in U.S.

THE CENTER ON BUDGET AND POLICY PRIORITIES said New York, California, Connecticut, Louisiana and Massachusetts are the top five states for income inequality. / COURTESY CENTER ON BUDGET AND POLICY PRIORITIES
THE CENTER ON BUDGET AND POLICY PRIORITIES said New York, California, Connecticut, Louisiana and Massachusetts are the top five states for income inequality. / COURTESY CENTER ON BUDGET AND POLICY PRIORITIES

PROVIDENCE – Rhode Island ranked 19th highest among the states for having the highest income inequality, according to a report from the Center on Budget and Policy Priorities.
The report, released this week, said New York, California, Connecticut, Louisiana and Massachusetts were the top five states for income inequality.
New York’s richest 5 percent of households have incomes nearly 20 percent higher than the poorest 20 percent of households. In Rhode Island, the difference between the wealthiest and poorest is 14.5 percent.
New York again held the top spot when comparing the incomes of the richest 20 percent of households with the poorest 20 percent, as incomes were nearly 11 percent higher for the richest residents. Rhode Island ranked 13th in that category, with incomes for the wealthy 8.8 percent higher.
In addition, in Rhode Island, the richest 5 percent of households capture 18.2 percent of total income, excluding capital gains.
The richest 5 percent of Rhode Island households for a family of four have an average income of $320,433, excluding capital gains. The top 20 percent have an income of $195,205, while the bottom 20 percent have an income of $22,102, the lower 20 percent have an income of $46,800, and the middle 20 percent have an income of $72, 714. The next highest 20 percent bracket has an income of $103,301.
Citing 2015 U.S. Census Bureau American Community Survey data, the report said the average income of the top 5 percent of households is now at least 10 times that of the bottom 20 percent in every state.
In the typical state, the average income of the top 5 percent was $325,928 compared with $22,014 for the bottom 20 percent and $66,165 for the middle 20 percent.
Nationwide, incomes also grew faster for the top 1 percent than the remaining 99 percent, 141 percent to 4 percent, from 1979 to 2013. In Rhode Island, the top 1 percent saw incomes grow 112 percent, while the remaining 99 percent saw income growth of 30 percent during that time period.
The center, which calls itself a nonpartisan research and policy institute, offered the following suggestions to ensure high earners pay their share:

  • Levy higher rates on high-income taxpayers or cap itemized deductions.
  • Establish or expand taxes on inherited wealth, such as estate taxes.
  • Strengthen taxes on corporations by eliminating costly tax breaks.
  • Broaden the sales tax base to include more services purchased by wealthy individuals.
  • Boost incomes among low- and moderate-wage working families by enacting state earned income tax credits.

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