Rhode Islanders Face the 8th Highest Tax Burden in U.S., According to New Study

Rhode Islanders Face the 8th Highest Tax Burden in U.S., According to New Study

A new study finds that Rhode Island residents face the 8th highest tax burden in the country.

While a three-month delay gave Americans some extra time to get their financial situation in order to pay their taxes, there is substantial impact by the economic devastation caused by the COVID-19 pandemic.

One simple ratio to judge the impact of taxes across the states is known as the “tax burden” and it helps cut through the complexity of the tax code and burden.

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“Unlike tax rates, which vary widely based on an individual’s circumstances, 'tax burden' measures the proportion of total personal income that residents pay toward state and local taxes. And it isn’t uniform across the U.S., either,” writes WalletHub.

To determine the residents with the biggest tax burdens, WalletHub compared the 50 states across the three tax types of state tax burdens — property taxes, individual income taxes and sales and excise taxes — as a share of total personal income in the state. Read below for the description of the methodology.

Rhode Island ranks 8th overall for the highest tax burden. 

Methodology

In order to determine the states that tax their residents the most and least aggressively, WalletHub compared the 50 states across the following three tax burdens and added the results to obtain the overall tax burden for each state:

Property Tax as a Share of Personal Income
Individual Income Tax as a Share of Personal Income
Total Sales & Excise Tax as a Share of Personal Income