PROVIDENCE – Rhode Islanders scrambling to put together their taxes ahead of April 17 may already be feeling the burden of Rhode Island’s tax laws – the Ocean State is home to the 7th highest tax burden in the country, according to a study by WalletHub Monday.
WalletHub’s 2018 study found that Rhode Islanders had a 10.14 percent tax burden, a combined measure of property tax, individual income tax, and total sale and excise tax, all as a share of total personal income in the state.
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The state’s property taxes were found to be the fifth most burdensome in the country, at 4.7 percent as a share of total state personal income. Individual income taxes accounted for 2.3 percent of Rhode Islanders’ personal income (No. 27), and sales and excise taxes made up 3.1 percent of total personal income (No. 34).
Across the country, red states saw a lower tax burden than blue states, the study found.
The new federal tax law has shifted the tax burden on some states by capping deductions for local and state taxes at $10,000. That means that those living in states with higher tax rates, like Rhode Island, New York and California, may see a tax hike, especially property owners in areas with high home values.
New York Gov. Andrew M. Cuomo, a Democrat, has said that the new law unfairly targets blue states, and that the cap on deductions is illegal “double taxation.” WalletHub’s ranking put New York at the top, with its overall tax burden coming in at a combined 13 percent. Hawaii and Maine came in second and third place, respectively.
“Contrary to erroneous assumptions, low state tax burdens do not promote long-term, stable economic growth,” said University of Alabama law professor Susan Pace Hamill in a prepared statement. However, she also noted that, “Excessively high state tax burdens, especially if imposed unfairly, will retard economic growth.”
Kate Talerico is a PBN staff writer.
