RI’s State and Local Tax Burden Still an F

Rhode Island’s state and local tax burden is still the sixth worst in the nation, according to the Tax Foundation’s updated ranking.  In fiscal year 2010, the latest year for available data, residents of the Ocean State once again paid 10.9% of their income to state and local governments.

As was true last year, using 2009 data, only Connecticut performed worse in New England, by the Tax Foundation’s measure.  Rhode Island’s state and local tax burden will therefore receive another F grade when the RI Center for Freedom & Prosperity updates its Report Card on Rhode Island Competitiveness early in 2013.

In 2010, Rhode Islanders paid $29 less per capita in state and local taxes to other states ($1,309), but $19 more to their own ($3,318).  The Tax Foundation added those sums together and calculated the result as a percentage of the average per capita income of $42,628, which represented an increase of only $155 from the prior year, still well below the 2008 average of $44,345.  More telling, perhaps, is that this increase was much smaller than the norm of the last three decades.