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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.