In Fiscal Year (FY) 2011, Rhode Island collected $5.1 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 the charts below, Rhode Island’s state and local tax burden (tax collections divided by personal income) was the fourteenth highest in the nation for FY 2011 at 11 percent—or 5.5 percent above the national average of 10.5 percent. Rhode Island’s tax burden has grown significantly over time by 69 percent to 11 percent in FY 2011 from 6.5 percent in FY 1950.
Rhode Island’s higher-than-average tax burden is driven by a very high property tax burden (5 percent, 4th highest). The remaining taxes are all at or below the national average.
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.