Greener Taxation Grass Across the Border
An interesting conversation took place in the comments section of my “Nothing to See Here” post, and this offering from Patrick is worth highlighting:
Let’s look at facts now:
Using the numbers here, on the state’s department of revenue web site:
And here at Riliving.com for RI’s:
East Providence: 15.43
N. Attleboro: 9.82
Fall River: 8.06
Those are all bordering towns. Why the difference? Rather than spewing your normal nonsense, I’ve provided you with facts and sources. Now explain it?
One commenter objected that Massachusetts has higher income tax, and that the state money is spread to municipalities, lower the need for property taxes. The analysis is complicated by the fact that Massachusetts’ income tax rate is 5.3% of adjusted income, while Rhode Island breaks its rates up into progressive tiers: 3.75% to $32,550, 7% to 78,850, 7.75% to $164,550, 9% to $357,700, and 9.9% over that. And of course, there’s RI’s flat tax option, at 6.5%. In other words, Rhode Island’s tax rate is only lower for folks at the bottom of the spectrum.
Another way to look at the comparison is through the prism of tax collections, and this chart (granted, from 2002) does show that Massachusetts collected $31.75 per $1,000 to Rhode Island’s $25.83. This moves us away from the topic of comparative property tax rates, but it appears to be the case that Massachusetts collects more in income tax because it takes more from people at lower ends of the income spectrum.
Put differently, if you’d like to own a home and work hard to increase your income, you’re better off in Massachusetts. If you’re content to rent or to live in subsidized housing and earn a small salary, you’re better off in Rhode Island. That may, we can suppose, have something to do with Rhode Island’s dire economic condition.