In Fiscal Year (FY) 2013, Rhode Island collected $5.4 billion in state and local taxes. While this is an impressive sum of money, it tells us little about whether or not the average Rhode Island taxpayer can afford this level of taxation.
As shown in Chart 1 below, Rhode Island’s state and local tax burden (tax collections divided by personal income) was the thirteenth highest in the nation for FY 2013 at 11 percent—this is 7 percent above the national average of 10.3 percent. As shown in Chart 2, Rhode Island’s tax burden has grown significantly over time by 75 percent to 11 percent in FY 2011 from 6.3 percent in FY 1950.
Rhode Island’s higher-than-average tax burden is driven by a very high property tax burden (4.9 percent, 4th highest). The remaining taxes are all at or below the national average.
Of course, the tax burdens for local government can vary just as much as they do among the 50 states. As such, we have also calculated the local government tax burden for every county in Rhode Island—this includes every taxing jurisdiction within the geographic county borders whether it is a city, a special district, or county government itself.
Rhode Island only has 5 counties and their local government tax burden are: Washington County, RI (6.1 percent), Bristol County, RI (5.3 percent), Kent County, RI (5.1 percent), Newport County, RI (5.1 percent), and Providence County, RI (4.7 percent).
J. Scott Moody has over 18 years as a public policy economist with a specialty in tax policy and has over 180 publications. He has worked for numerous national and state-based think tanks such as Federalism In Action, Tax Foundation, Heritage Foundation, and The Maine Heritage Policy Center.