U.S. taxpayers in so-called red states tend to get a better return on investment for their tax dollars, compared to high-tax blue states, according to a study for the 2023 tax season.
Many Americans are observant as to what they pay in federal, state, and local taxes, but many are not fully aware on exactly what they receive in return from the government.
Each of the 50 states have variously different tax burdens, which do not always align with tax rates and quality of service.
The survey asked whether people in high-tax states received better government services or if low-tax states delivered more efficient or lower-quality services to assess in which states taxpayers got the most and least bang for their buck.
Red State Quality of Life Surpasses Blue States
The report compiled a database on states’ return on investment (ROI), which is measured by combining regional tax rates with the quality of the services that residents in each of of the 50 states receive within five categories: education, health, safety, economy, and infrastructure and pollution.WalletHub’s data set also includes a total of 29 key metrics which were each graded on a 100-point scale, with a score of 100 representing the best quality of government service.
Data from government agencies and third-party institutions were used to determine the quality of individual states’ government services.
States’ government services scores were then compared with their tax collection figures to see which which state’s residents’ got the best return on their tax dollar investments.
Federal income tax rates are uniform nationwide, but ROI varies based on where one lives, as some states receive far more federal funding than others, according to the survey.
WalletHub’s list of states with highest and lowest ROI ratings are given below:
The state with the best tax rate to spending was New Hampshire, followed by Florida. Alaska, South Dakota, and Texas, with the worse-rated state being California, followed by Hawaii, New Mexico, Arkansas, and Delaware.
The best state school system on the list was Massachusetts, while New Mexico had the lowest rating.
Utah had the best hospitals, while New Jersey had the bottom-rated health system.
Tennessee was at the top of the list states with the best road and bridge infrastructure, with Rhode Island maintaining the most degraded network.
New Hampshire had the lowest rate of poverty, while Mississippi had the worst.
When it came to violent crime, Maine had the lowest, while Alaska, Arkansas, Louisiana, New Mexico, and Tennessee each tied for the highest concentrated rate.
Regarding water quality, California, Delaware, Hawaii, Iowa, Kentucky, and Maine have the best, with Mississippi, New Jersey, West Virginia tied for states with the most polluted water.
Red state taxpayers received a better ROI, at 21.52, while blue state residents faced a 29.58 rating.
The lower the ROI rating, the better the quality of services to taxes.
Meanwhile, when it came to overall government services, Connecticut, Minnesota, New Hampshire, Vermont, and Virginia were at the top five, with Louisiana leading the bottom five, followed by Alaska, Mississippi, New Mexico, and West Virginia.
Americans will have until April 18 to submit their taxes to the Internal Revenue Service.
The U.S. economy has been facing three years of economic turmoil and high inflation that has hurt millions of taxpayers nationwide.
