WalletHub: R.I. one of worst states for the rich

WALLETHUB RANKED the best states to be rich or poor from a tax perspective, and unfortunately, Rhode Island lands among the worst states, regardless of income. Rich residents fared the worst, though, as the state ranked 45th in the high-income category. / COURTESY WALLETHUB
WALLETHUB RANKED the best states to be rich or poor from a tax perspective, and unfortunately, Rhode Island lands among the worst states, regardless of income. Rich residents fared the worst, though, as the state ranked 45th in the high-income category. / COURTESY WALLETHUB

PROVIDENCE – WalletHub rated the best states to be rich or poor from a tax perspective, and unfortunately, Rhode Island lands among the worst states, regardless of income.
However, if you’re rich in Rhode Island, taxes will take more out of your pocket – high-income residents ranked 45th among all states and the District of Columbia for a 9.9 percent tax burden.
With tax season under way, WalletHub cited a report from the Institute on Taxation & Economic Policy, which found that many taxes, including payroll taxes, sales taxes, and some state and local taxes, are regressive, which means they take more money out of the pockets of Americans in the lower- and middle-income brackets than from wealthier families.
WalletHub did not focus on tax rates for the study, only on the share of a person’s income that he or she contributes to various tax obligations.
WalletHub found that lower-income Rhode Island residents fared better than their higher-income counterparts, ranking 37th with the tax burden representing 10.3 percent of their income. Middle-income residents ranked 42nd, with the tax burden representing 10.7 percent of their income.
The largest gaps in taxes among residents were in sales tax – low-income residents pay 5.6 percent of their income on sales tax, whereas high-income residents pay 2.2 percent, and income tax, for which low-income residents pay 1 percent, compared with high-income residents at 3.3 percent. Middle-income residents pay the most in property taxes at 4.8 percent, while low-income residents pay 3.7 percent and high-income residents, 4.4 percent.
In fact, Rhode Island ranked first on a breakdown of the top five states for lowest property tax burden gap between rich and poor.
Alaska ranked first – the best ranking – across all levels – for a 5.4 percent tax burden for low-income residents, 4.5 percent for middle-income residents and 3.4 percent for high-income residents.
Massachusetts was 32nd for low-income (9.9 percent), 31st for middle-income (9.9 percent) and 39th for high-income (9.2 percent).
The worst state for low-income residents was Hawaii (12.3 percent). Illinois ranked last for middle-income residents (11.3 percent), and Connecticut was the worst for high-income residents (11.2 percent).

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