2021’s States with the Best & Worst Taxpayer ROI

Wallet Hub, Mar 23, 2021

Tax Day can be a painful reminder of how much we have to invest in federal, state and local governments, though many of us are unaware of exactly what they give us in return. As a result, this creates a disconnect in the minds of taxpayers between the amount of money we should fork over on Tax Day (May 17 this year) – and how much we deserve in return.

Americans have looked at taxes with especially high scrutiny during the COVID-19 pandemic. In fact, 74% think the government hasn’t handled their tax dollars wisely during this crisis, according to WalletHub’s Taxpayer Survey. We do know, however, that taxpayer return on investment, or ROI, varies based where one lives. Federal income-tax rates are uniform across the nation, yet some states receive far more federal funding than others. Different states have also received vastly different amounts of COVID-19 aid.

Federal taxes and support are only part of the story, though. Different states have dramatically different tax burdens. This begs the question of whether people in high-tax states receive superior government services. Likewise, are low-tax states more efficient or do they receive low-quality services? In short, where do taxpayers get the most and least bang for their buck?

WalletHub aimed to answer that question by contrasting state and local tax collections with the quality of the services residents receive in each of the 50 states within five categories: Education, Health, Safety, Economy, and Infrastructure & Pollution. Their data set includes a total of 30 key metrics….

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State and Local Taxes Paid vs. Spending Received by State

Detailed Breakdown by State