Get all your news in one place.

100’s of premium titles.
One app.

Start reading

Get all your news in one place.

100’s of premium titles. One news app.

Start reading

The Street

Samanda Dorger

Which States Offer the Most and Least Services for Your Tax Dollars?

Economy Pollution WalletHub

As if being squeezed by inflation isn’t enough, to add insult to injury, many taxpayers may find their refund— if they get one— is smaller this year.

As another annual tax deadline approaches, imagine trying to survive off $19,000 a year, and on top of that having to pay 11% —over $2,000—in taxes.

Most state and local tax systems take a much greater share of income from low- and middle-income families than from wealthy families, according to the Institute on Taxation and Economic Policy. ITEP says that tax structures in 45 states exacerbate income inequality. States commended as “low-tax” are often high-tax for low- and middle-income families, because of sales and excise taxes.

The national effective state and local tax rate is 11.4% for the lowest-income 20% of taxpayers; 9.9% for the middle 20%; and 7.4% for the top 1% of taxpayers, according to ITEP.

In a survey of 200 taxpayers by WalletHub, 73% of respondents said the government does not spend their tax dollars wisely.

Most of our federal tax dollars go toward Social Security, health insurance, defense, economic security programs, benefits for veterans and federal retirees and interest on debt according to the Center on Budget and Policy Priorities.

But beside state and federal taxes, tax burdens include a lot of other taxes, such as sales taxes, excise taxes and estate taxes.

You have to wonder: Are you getting your money’s worth? Which states give you the most bang for your buck?

In order to determine which states yield the best and worst return on investment for taxpayers, personal finance site WalletHub compared the quality of government services received by residents to the total state and local taxes they pay in each of the 50 states.

The government-service categories are:

Education, which includes school system, university system, graduation rates, pre-K funding and others;
Health includes life expectancy, health insurance premiums and quality of health care and hospitals;
Safety includes crime rates and vehicle fatalities;
Economy includes median household income, job growth, poverty and unemployment rates;
Infrastructure and pollution includes quality of roads, commute times, parks and recreation, water and air quality.

Detailed Breakdown by State

Here’s how all 50 states rank by overall government services, according to WalletHub, and a breakdown of rankings for each category. Virginia is the number one overall. The effective tax rates for each state are from the Tax Foundation.

Which States Offer the Most and Least Services for Your Tax Dollars?

Detailed Breakdown by State

1. Virginia

2. Minnesota

3. Vermont

4. New Hampshire

5. Connecticut

6. Massachusetts

7. Utah

8. Rhode Island

9. Iowa

10. Maryland

11. North Dakota

12. Wisconsin

13. Maine

14. New Jersey

15. Nebraska

16. Wyoming

17. Delaware

18. Indiana

19. Idaho

20. New York

21. Illinois

22. Washington

23. Florida

24. Pennsylvania

25. South Dakota

26. Ohio

27. Kentucky

28. Michigan

29. Kansas

30. Colorado

31. Hawaii

32. North Carolina

33. Georgia

34. Montana

35. California

36. Texas

37. Oregon

38. Missouri

39. Tennessee

40. Nevada

41. Oklahoma

42. Alabama

43. Arizona

44. Arkansas

45. South Carolina

46. West Virginia

47. Mississippi

48. Alaska

49. New Mexico

50. Louisiana