Where is your tax money going? GOP states offer the best value, research results

Taxpayers in red states typically get the most bang for their buck while their Democratic counterparts offer less value, a study has found.

Seven of the top 10 states for taxpayer return on investment are Republican, the study found. At the bottom of the table, eight of the ten worst performing states are Democrats.

WalletHub’s research compared the taxes paid in each state to the quality of government services such as schools, infrastructure, and law enforcement. States were defined as red or blue depending on the election result in the 2020 presidential election.

New Hampshire, a Democratic state, came out on top after the study found it has one of the lowest tax burdens but also one of the best ratings for its government services. New Hampshire is a major swing state with a Republican governor and Democrats in the House and Senate.

California offers the worst value to taxpayers and has the highest tax burden per capita, while ranking 35th in quality of government services, according to the study.

A study by WalletHub ranked states based on how much value residents receive for their taxes. It turns out that Republican states typically get more bang for their buck than their Democratic counterparts

New Hampshire, a Democratic state, came out on top after the study found it has one of the lowest tax burdens but also one of the best ratings for its government services. Only three of the top ten states by taxpayer value were Democrats. Pictured: the New Hampshire State House in Concord

California bottomed the list after the study found residents have the highest tax burden in America, but the state only ranks 35th for government services. Some San Francisco businesses have even threatened to stop paying taxes because of the homelessness crisis (pictured in August 2022).

The study was released before the April 18 deadline for Americans to file their taxes.

A separate recent study by WalletHub found that 73 percent of people don’t believe the government is spending taxpayers’ money wisely.

The new study explains, “However, we know that taxpayers’ return on investment, or ROI, varies based on where they live. Federal income tax rates are uniform across the country, yet some states receive far more federal funding than others.

“Federal taxes and assistance, however, are only part of the story. Different states have dramatically different tax burdens.

“This raises the question of whether people in high-tax states receive better government benefits. Are low tax states more efficient or do they receive inferior services? In short, where are taxpayers getting the most and least bang for their buck?’

Many of the best value states have no state income tax: New Hampshire, Florida, Alaska, South Dakota, Texas, and Wyoming.

The opposite is true for those that offer the worst value. California has the highest income tax in the country at 13.3 percent.

Hawaii (11 percent), Oregon (9.9 percent), Vermont (8.75 percent), and New York (8.82 percent) also levy some of the highest income tax rates.

Florida was ranked the second best state in the country for taxpayer value. Many of the states in the top ten do not levy a state income tax. Pictured: South Beach, Miami

Texas was fifth in the league table. Pictured: The Texas State Capitol in Austin

According to WalletHub, the research methodology compared the quality of government services residents received to the total state and local taxes they pay in each of the 50 states.

Services were grouped into five categories: education, health, safety, economy, and infrastructure and pollution.

Each category was then broken down into a further 29 metrics, which were scored on a 100-point scale, and the average scores were used to calculate the overall government service score.

Education included things like the quality of the public university system, the high school graduation rate, and the amount of pre-K funding.

For health, the study used factors such as hospital beds per 1,000 population and average life expectancy.

Safety was assessed based on crime rates and road deaths.

The economies of the states were assessed based on factors such as household income, poverty and the unemployment rate.

States’ infrastructure and pollution scores were ranked based on factors such as road quality, average commute times, water quality, and air pollution.

Virginia ranked highest in government services with a score of 71.12 out of 100. It was followed by Minnesota (70.95), Vermont (68.77), and New Hampshire (68.17).

Louisiana performed worst at 32.49, followed by New Mexico (34.93), Alaska (36.09), and Mississippi (39.62).

The study follows a separate investigation that found that cities in the center of the country offer the best value in terms of cost of living and taxes, while coastal cities are the most expensive. The chart shows the take-home value of $100,000 after accounting for taxes and living expenses

Memphis is the US city where a salary of $100,000 goes the furthest. A lack of state income taxes and a low cost of living means the effective take-home salary is about $86,000

New York City was the most expensive city in the country, where a combination of state taxes and the high cost of living made a $100,000 salary feel more like $36,000

The new study follows a separate study that found that a $100,000 paycheck goes the farthest in Memphis, Tennessee, while New York City is the worst city in the United States to live on that amount.

In Memphis, the relative value of the six-figure salary after accounting for living expenses is about $86,000, while in New York City it’s only about $35,000.

The chilling data was compiled by personal financial advisor SmartAsset, which took into account state and local taxes, local living costs and the impact of recent inflation to determine which cities were the cheapest and most expensive to live in.

Seven of the ten cheapest cities — where $100,000 went the furthest — were in Texas, while six of the most expensive cities were in California and the West Coast.

In New York City — the least cost-effective city in the country — local taxes and the cost of living have reduced a $100,000 paycheck to an effective take-home salary of $35,791.

Source: | This article originally belongs to Dailymail.co.uk