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

PROVIDENCE – Rhode Island is one of the worst states in the nation to be a taxpayer, according to WalletHub’s latest survey on the best and worst states to be a taxpayer.
The Ocean State ranked fourth from the bottom – or 48th on the list that also included the District of Columbia – for average local and state taxes of $7,159, which is 27 percent more than the national average.
Illinois ranked last, for average state and local taxes of $7,719 – 37 percent more than the national average.
WalletHub, a personal finance website, said the average American spends approximately $17,000 in federal income taxes each year, but there is “significant disparity” when it comes to state and local taxes.
“Differences in state tax obligations – as well as the services for which funds are used – can have an impact on populous migration and thus the strength of local economies. Such trends are clearly evidenced at the top of the socioeconomic totem pole, with professional athletes, for example, often taking up residence in Florida or Texas for the tax break,” WalletHub said.
To find which states have the least and most burdensome taxes, WalletHub calculated relative income tax obligations by applying the average American’s income to the effective income taxes rate in each state and locality. Alaska ranked the best, with average local and state taxes at $2,993 – 47 percent less than the national average.
Rhode Island also ranked among the top five states for the highest cigarette excise tax rates at No. 49, only ahead of Massachusetts (No. 50) and New York (No. 51).
In categories of real estate tax and vehicle property tax, Rhode Island also scored low, at No. 42 (for an average of $2,779) and No. 51 (for an average of $1,133), respectively. It fared better in categories of income tax, and sales and excise tax, coming in at No. 20 (for an average of $1,209) and No. 21 (for an average of $2,037), respectively.

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