2018’s states with the best and worst taxpayer ROI

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With Tax Day approaching, WalletHub today released its latest analysis of the U.S. tax landscape, an in-depth look at the states with the Best & Worst Taxpayer Return on Investment in 2018. WalletHub used 25 metrics to compare the quality and efficiency of state-government services across five categories — Education, Health, Safety, Economy, and Infrastructure & Pollution — taking into account the drastically different rates at which citizens are taxed in each state.

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 every April and how much we deserve in return.

Perhaps that’s why, according to WalletHub’s Taxpayer Survey, 55 percent of U.S. adults feel they pay too much in taxes and why 90 percent don’t think that the government uses tax revenue wisely. 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. But federal taxes and support are only part of the story.

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. Our data set includes a total of 25 key metrics. Read on for our findings, methodology and commentary from a panel of experts.

Read the full report.