Which State Taxes Provide the Best Return on Investment?

May 7, 2014

Is your state spending your tax dollars wisely? A new study from WalletHub sought to measure the quality and efficiency of state government services compared to state and local tax rates in order to determine which residents received the most "bang for their buck" for their tax dollars, reports the Fiscal Times.

The study looked at six categories -- infrastructure, education, health, safety, economy and pollution -- and evaluated the quality and efficiency of government services in those sectors.

  • The report found that Arkansas residents are the worst off, in terms of the taxes that they pay compared to the services that they receive. Wyoming taxpayers, on the other hand, ranked at the top of the list for their return on investment.
  • Behind Wyoming, the states with the highest return on investment were Alaska, South Dakota, Washington, North Dakota, Colorado, Florida, Texas, Utah and Massachusetts.
  • Rounding out the bottom of the list, behind Arkansas, were Mississippi, Louisiana, the District of Columbia, North Carolina, West Virginia, Tennessee, California, Alabama and Kentucky.

California has the second highest average annual state and local taxes, adding up to $9,509. It received the seventh worst return on investment ranking.

Source: Marine Cole, "10 Worst States for Your Tax Dollars," Fiscal Times, April 25, 2014. "States with the Best & Worst Taxpayer ROI," WalletHub, April 2014.

 

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