WalletHub: R.I. again one of the worst states to be a taxpayer

RHODE ISLAND is one of the most expensive states to be a taxpayer, according to personal finance website WalletHub. / COURTESY WALLETHUB
RHODE ISLAND is one of the most expensive states to be a taxpayer, according to personal finance website WalletHub. / COURTESY WALLETHUB

PROVIDENCE – Rhode Island has the fifth-highest tax rates in the nation, according to WalletHub’s latest study.
Still, Rhode Island managed to improve one spot overall compared with last year, according to WalletHub.
The Ocean State ranked 47th for its overall state and local tax rates, estimated annually at $7,255, nearly 26 percent more than the national average. Illinois has the most expensive taxes at an average of $7,836, 35.8 percent more than the national average. Alaska is the most inexpensive, with $3,066 in taxes, nearly 47 percent less than the national average.

Rhode Island also ranked highest in the nation for vehicle property taxes (an average of $1,098), and among the highest for real estate taxes, coming in at 42nd (average of $2,829). Rhode Island also is third-highest for cigarette excise taxes.
It fared better in subcategories of income tax, ranking 20th, and sales tax, ranking 21st, at $1,239 and $2,089, respectively.

With tax season underway, WalletHub said its analysts compared various tax rates among the 50 states and the District of Columbia in terms of the national average consumer’s income and spending habits.
Every year, WalletHub said the average U.S. household pays more than $5,700 in federal income taxes.
“As you might expect, differences in state tax obligations – as well as the services for which tax dollars are allocated – can drive residents out of or draw them in to a state and thus impact the strength of local economies. Such trends are evident among professional athletes and retirees, for example, groups that often relocate to Florida or Texas for the income-tax breaks they offer,” WalletHub said.

For the study, WalletHub said it assumed that the median U.S. household had an income equal to $53,889, owns a home valued at $175,700 (median U.S. home value), owns a car valued at $23,070 and spends annually an amount equal to the spending of a household earning the median U.S. income.

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