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Monday, November 11, 2019
HomePolicyStudy: Red States Have Higher Taxpayer Return on Investment (ROI)

Study: Red States Have Higher Taxpayer Return on Investment (ROI)

TALLAHASSEE, Fla. - Florida Gov. Rick Scott attends the "First for Jobs" rally with roughly 600 people on March 14, 2017. (Photo: Carolyn Allen)
TALLAHASSEE, Fla. - Florida Gov. Rick Scott attends the "First for Jobs" rally with roughly 600 people on March 14, 2017. (Photo: Carolyn Allen)

TALLAHASSEE, Fla. – Florida Gov. Rick Scott attends the “First for Jobs” rally with roughly 600 people on March 14, 2017. (Photo: Carolyn Allen)

A new study finds Red States have a higher taxpayer return on investment (ROI) than Blue States, with an average ranking of 20.60 juxtaposed to 32.85.

WalletHub took a look at state and local tax collections for each of the 50 states and contrasted them with 25 key metrics to gauge the quality of the services residents receive. They were broken down by 5 categories: Education, Health, Safety, Economy, and Infrastructure & Pollution.

Each category was worth 20 points.

Worth noting, States were classified as Red or Blue based on how they voted in the 2016 presidential election. That’s significant considering several states have policies that would not be considered Red or Blue. For instance, New Hampshire, which ranked first for ROI, is not a tax-and-spend state.

Whether it’s currently led by a Democrat or voted for a Democrat on the national level, policy-wise The Granite State is a conservative state.

Rank (1=Best) State Rank (50=Worst) State
1 New Hampshire 41 Maryland
2 Florida 42 Delaware
3 South Dakota 43 Nevada
4 Colorado 44 New Mexico
5 Virginia 45 Vermont
6 Alaska 46 New York
7 Missouri 47 North Dakota
8 Texas 48 California
9 Utah 49 Arkansas
10 Iowa 50 Hawaii

Hawaii, which is arguably the Bluest of Blue States, has the worst taxpayer return on investment (ROI), with Arkansas (Red) and California (Blue) not far behind at 49 and 48, respectively.

Federal Taxes Paid vs. Spending Received by State

‘Taxpayer ROI’ Rank
(1=Best)
State ‘Total Taxes Paid per Capita’ Rank* ‘Overall Government Services’ Rank
1 New Hampshire 3 2
2 Florida 2 31
3 South Dakota 10 14
4 Colorado 14 13
5 Virginia 17 9
6 Alaska 1 49
7 Missouri 5 35
8 Texas 6 36
9 Utah 21 10
10 Iowa 36 3
11 Nebraska 28 11
12 Georgia 11 39
13 South Carolina 4 42
14 Arizona 12 37
15 Wisconsin 35 6
16 Tennessee 8 41
17 Idaho 23 20
18 Oklahoma 13 40
19 Ohio 15 32
20 Indiana 25 22
21 Kansas 30 16
22 Montana 16 33
23 North Carolina 19 30
24 Alabama 9 47
25 Maine 32 18
26 Illinois 34 15
27 Rhode Island 33 19
28 Michigan 27 29
29 Pennsylvania 31 25
30 Oregon 26 34
31 Kentucky 22 38
32 Wyoming 39 17
33 Washington 37 24
34 Louisiana 7 50
35 New Jersey 41 12
36 Massachusetts 43 7
37 Minnesota 47 1
38 Mississippi 18 45
39 Connecticut 46 8
40 West Virginia 24 44
41 Maryland 40 27
42 Delaware 42 23
43 Nevada 29 43
44 New Mexico 20 48
45 Vermont 48 4
46 New York 44 21
47 North Dakota 50 5
48 California 45 28
49 Arkansas 38 46
50 Hawaii 49 26

*“Per Capita” includes the population aged 18 and older.

Methodology

In order to determine which states yield the best and worst return on investment (ROI) for taxpayers, 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.

First, we analyzed each state across five key government-service categories: 1) Education, 2) Health, 3) Safety, 4) Economy and 5) Infrastructure & Pollution. The categories were further broken down into 25 relevant metrics, which are listed below with their corresponding weights. Each metric was graded on a 100-point scale, with a score of 100 representing the best quality of government service.

We then determined each state’s weighted average across all 25 metrics to calculate its “Overall Government Services Score.”

Finally, we constructed the Taxpayer ROI ranking by comparing each state’s “Overall Government Services Score” to its “Total Taxes Paid per Capita.” “Per Capita” includes the population aged 18 and older.

Written by
Staff Writing Group

People's Pundit Daily delivers reader-funded data journalism covering the latest news in politics, polls, elections, business, the economy and markets.

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    I honestly wanna know how red states have better ROI when they’re also more dependent on fed govt money.

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