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.
1. Virginia
Effective tax rate: 12.5%
- Education rank: 4
- Health rank: 20
- Safety rank: 8
- Economy rank: 2
- Infrastructure & pollution rank: 8
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2. Minnesota
Effective tax rate: 12.1%
- Education rank: 11
- Health rank: 2
- Safety rank: 11
- Economy rank: 3
- Infrastructure & pollution rank: 5
3. Vermont
Effective tax rate: 13.6%
- Education rank: 10
- Health rank: 11
- Safety rank: 4
- Economy rank: 39
- Infrastructure & pollution rank: 4
4. New Hampshire
Effective tax rate: 9.6%
- Education rank: 15
- Health rank: 7
- Safety rank: 1
- Economy rank: 5
- Infrastructure & pollution rank: 37
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5. Connecticut
Effective tax rate: 15.4%
- Education rank: 1
- Health rank: 13
- Safety rank: 6
- Economy rank: 32
- Infrastructure & pollution rank: 25
6. Massachusetts
Effective tax rate: 11.5%
- Education rank: 8
- Health rank: 3
- Safety rank: 5
- Economy rank: 25
- Infrastructure & pollution rank: 46
7. Utah
Effective tax rate: 12.1%
- Education rank: 18
- Health rank: 15
- Safety rank: 16
- Economy rank: 1
- Infrastructure & pollution rank: 10
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8. Rhode Island
Effective tax rate: 11.4%
- Education rank: 9
- Health rank: 1
- Safety rank: 7
- Economy rank: 36
- Infrastructure & pollution rank: 45
9. Iowa
Effective tax rate: 11.2%
- Education rank: 12
- Health rank: 4
- Safety rank: 13
- Economy rank: 12
- Infrastructure & pollution rank: 13
10. Maryland
Effective tax rate: 11.3%
- Education rank: 3
- Health rank: 10
- Safety rank: 21
- Economy rank: 7
- Infrastructure & pollution rank: 34
11. North Dakota
Effective tax rate: 8.8%
- Education rank: 25
- Health rank: 6
- Safety rank: 22
- Economy rank: 22
- Infrastructure & pollution rank: 1
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12. Wisconsin
Effective tax rate: 10.9%
- Education rank: 2
- Health rank: 17
- Safety rank: Safety rank: 12
- Economy rank: 11
- Infrastructure & pollution rank: 48
13. Maine
Effective tax rate: 12.4%
- Education rank: 21
- Health rank: 9
- Safety rank: 2
- Economy rank: 42
- Infrastructure & pollution rank: 23
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14. New Jersey
Effective tax rate: 13.2%
- Education rank: 7
- Health rank: 16
- Safety rank: 3
- Economy rank: 9
- Infrastructure & pollution rank: 50
15. Nebraska
Effective tax rate: 11.5%
- Education rank: 17
- Health rank: 24
- Safety rank: 19
- Economy rank: 10
- Infrastructure & pollution rank: 7
16. Wyoming
Effective tax rate: 7.5%
- Education rank: 32
- Health rank: 39
- Safety rank: 10
- Economy rank: 27
- Infrastructure & pollution rank: 2
17. Delaware
Effective tax rate: 12.4%
- Education rank: 5
- Health rank: 29
- Safety rank: 33
- Economy rank: 33
- Infrastructure & pollution rank: 6
18. Indiana
Effective tax rate: 9.3%
- Education rank: 14
- Health rank: 31
- Safety rank: 20
- Economy rank: 18
- Infrastructure & pollution rank: 17
19. Idaho
Effective tax rate: 10.7%
- Education rank: 47
- Health rank: 28
- Safety rank: 9
- Economy rank: 15
- Infrastructure & pollution rank: 16
20. New York
Effective tax rate: 15.9%
- Education rank: 13
- Health rank: 25
- Safety rank: 14
- Economy rank: 40
- Infrastructure & pollution rank: 40
21. Illinois
Effective tax rate: 12.9%
- Education rank: 19
- Health rank: 21
- Safety rank: 26
- Economy rank: 23
- Infrastructure & pollution rank: 24
22. Washington
Effective tax rate: 10.7%
- Education rank: 20
- Health rank: 23
- Safety rank: 25
- Economy rank: 20
- Infrastructure & pollution rank: 26
23. Florida
Effective tax rate: 9.1%
- Education rank: 6
- Health rank: 37
- Safety rank: 28
- Economy rank: 19
- Infrastructure & pollution rank: 39
24. Pennsylvania
Effective tax rate: 10.6%
- Education rank: 23
- Health rank: 14
- Safety rank: 23
- Economy rank: 31
- Infrastructure & pollution rank: 36
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25. South Dakota
Effective tax rate: 8.4%
- Education rank: 38
- Health rank: 27
- Safety rank: 39
- Economy rank: 13
- Infrastructure & pollution rank: 3
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26. Ohio
Effective tax rate: 10.0%
- Education rank: 35
- Health rank: 30
- Safety rank: 17
- Economy rank: 28
- Infrastructure & pollution rank: 19
27. Kentucky
Effective tax rate: 9.6%
- Education rank: 24
- Health rank: 36
- Safety rank: 18
- Economy rank: 37
- Infrastructure & pollution rank: 9
28. Michigan
Effective tax rate: 8.6%
- Education rank: 28
- Health rank: 19
- Safety rank: 27
- Economy rank: 26
- Infrastructure & pollution rank: 27
29. Kansas
Effective tax rate: 11.2%
- Education rank: 31
- Health rank: 12
- Safety rank: 37
- Economy rank: 14
- Infrastructure & pollution rank: 22
30. Colorado
Effective tax rate: 9.7%
- Education rank: 41
- Health rank: 8
- Safety rank: 40
- Economy rank: 4
- Infrastructure & pollution rank: 29
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31. Hawaii
Effective tax rate: 14.1%
- Education rank: 43
- Health rank: 5
- Safety rank: 15
- Economy rank: 46
- Infrastructure & pollution rank: 35
32. North Carolina
Effective tax rate: 9.9%
- Education rank: 16
- Health rank: 43
- Safety rank: 35
- Economy rank: 29
- Infrastructure & pollution rank: 14
33. Georgia
Effective tax rate: 8.9%
- Education rank: 39
- Health rank: 40
- Safety rank: 30
- Economy rank: 6
- Infrastructure & pollution rank: 21
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34. Montana
Effective tax rate: 10.5%
- Education rank: 33
- Health rank: 26
- Safety rank: 42
- Economy rank: 35
- Infrastructure & pollution rank: 11
35. California
Effective tax rate: 13.5%
- Education rank: 27
- Health rank: 22
- Safety rank: 34
- Economy rank: 41
- Infrastructure & pollution rank: 41
36. Texas
Effective tax rate: 8.6%
- Education rank: 37
- Health rank: 38
- Safety rank: 38
- Economy rank: 16
- Infrastructure & pollution rank: 32
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37. Oregon
Effective tax rate: 10.8%
- Education rank: 42
- Health rank: 18
- Safety rank: 31
- Economy rank: 43
- Infrastructure & pollution rank: 38
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38. Missouri
Effective tax rate: 9.3%
- Education rank: 26
- Health rank: 35
- Safety rank: 45
- Economy rank: 8
- Infrastructure & pollution rank: 43
39. Tennessee
Effective tax rate: 7.6%
- Education rank: 22
- Health rank: 42
- Safety rank: 46
- Economy rank: 21
- Infrastructure & pollution rank: 18
40. Nevada
Effective tax rate: 9.6%
- Education rank: 30
- Health rank: 33
- Safety rank: 32
- Economy rank: 50
- Infrastructure & pollution rank: 33
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41. Oklahoma
Effective tax rate: 9%
- Education rank: 34
- Health rank: 44
- Safety rank: 43
- Economy rank: 30
- Infrastructure & pollution rank: 20
42. Alabama
Effective tax rate: 9.8%
- Education rank: 40
- Health rank: 50
- Safety rank: 36
- Economy rank: 24
- Infrastructure & pollution rank: 28
43. Arizona
Effective tax rate: 9.5%
- Education rank: 44
- Health rank: 32
- Safety rank: 41
- Economy rank: 17
- Infrastructure & pollution rank: 47
44. Arkansas
Effective tax rate: 10.2%
- Education rank: 29
- Health rank: 41
- Safety rank: 49
- Economy rank: 38
- Infrastructure & pollution rank: 12
45. South Carolina
Effective tax rate: 8.9%
- Education rank: 36
- Health rank: 46
- Safety rank: 47
- Economy rank: 34
- Infrastructure & pollution rank: 15
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46. West Virginia
Effective tax rate: 9.8%
- Education rank: 46
- Health rank: 48
- Safety rank: 24
- Economy rank: 48
- Infrastructure & pollution rank: 44
47. Mississippi
Effective tax rate: 9.8%
- Education rank: 45
- Health rank: 47
- Safety rank: 29
- Economy rank: 44
- Infrastructure & pollution rank: 49
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48. Alaska
Effective tax rate: 4.6%
- Education rank: 50
- Health rank: 49
- Safety rank: 44
- Economy rank: 45
- Infrastructure & pollution rank: 31
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49. New Mexico
Effective tax rate: 10.2%
- Education rank: 49
- Health rank: 34
- Safety rank: 48
- Economy rank: 49
- Infrastructure & pollution rank: 30
50. Louisiana
Effective tax rate: 9.1%
- Education rank: 48
- Health rank: 45
- Safety rank: 50
- Economy rank: 47
- Infrastructure & pollution rank: 42
You can see how the states rank by best and worst ROI, as well as the methodology for this ranking at WalletHub.com.
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