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‘Tis the season to pay taxes, and many of us wonder just how that money is used, especially in our states.
States spend tax revenue to pay for education, transportation and other infrastructure, public safety, correctional facilities and social safety-net programs, including unemployment insurance and workers’ compensation.
RewardExpert analyzed data from the Survey of State and Local Government Finances conducted by the U.S. Census Bureau to determine which states give residents the best return on their investment.
They point out that paying the least income tax is not necessarily the best deal:
In order to have lower taxes, citizens must sacrifice some of these (state-funded services), or else pay more in fees and charges, such as highway tolls, tuition at state universities and community colleges, utility bills, and so forth.
The study calculated the value that residents receive from governmental spending, compared with various taxes and charges paid by residents.
Here are the RewardExpert results, beginning with the state that ranked lowest for its return on taxpayer dollars. How the calculation works is spelled out further below: