The 10 Best (and Worst) States for Taxpayers in 2017

tax refund check

Are your tax dollars being put to good use where you live? | Mark Wilson/Getty Images

There’s nothing like a quick overview of your pay stub to get you aggravated and disheartened. It’s hard not to feel rebellious when you realize just how much of your hard-earned paycheck is given to the government for things that might not apply to you.

We fork over a sizeable chunk of our earnings hoping it’s used for something beneficial. But state tax rates are drastically different across the board. So where do taxpayers see the biggest bang for their buck?

WalletHub analyzed the total taxes paid per capita verses the efficiency of the state government services in each U.S. state. Categories, such as education, health, safety, economy, and infrastructure and pollution, were all considered. What resulted was a definitive list outlining the best and worst states for taxpayer return on investment.

Are you simply throwing tax dollars at an irresponsible state government? Let’s take a closer look at the 10 best and 10 worst states for taxpayers. Did your state get a passing grade?

10. Nebraska

Nebraska state park

Nebraska has one of the best taxpayer returns on investment in the country. | Visit Nebraska via Facebook

We kick off our countdown in the Midwest. It seems as though taxpayer dollars are well spent on Nebraska’s infrastructure. It ranks fifth overall in that category, according to WalletHub. And the Cornhusker State ranks third for its economy, due in part to a low unemployment rate at 3.2%, as of February 2017, and a median household income of $52,196, just below the $53,657 national median.

9. Texas

Round Rock, Texas

Round Rock, Texas |

Head south to one of the largest U.S. states: Texas. Residents of the Lone Star State should be satisfied with the government’s attention to both education and the economy. In fact, WalletHub credits Texas with the fifth lowest dropout rate in the nation and ranks it as 21st overall for school systems. A promising economy awards its residents with an unemployment rate of 4.9%, just slightly more than the national average of 4.7%, as of February 2017. But its crime rate is high. WalletHub ranked Texas 41st overall for safety.

8. Missouri

St. Louis Arch

St. Louis, Missouri | Karen Bleier/AFP/Getty Images

We head back to the Midwest to find our eighth best state for taxpayer return on investment. Missouri is credited with the fifth lowest taxes paid per capita, according to WalletHub. However, Missouri is a state with rural, urban, and federal lands, so it falls toward the bottom of the list for government services, 37th, because a lot of tax dollars go toward supporting protected land and military bases. Its highest scores came in the health (29th) and economy (24th) categories.

7. Utah

Angel's Landing in Zion National Park

Angels Landing in Zion National Park, Utah |

Utah wins top prize for its stable economy, ranking first overall, according to WalletHub. In addition, its residents enjoy state tax rates below the median amount paid per capita. Most won’t encounter any trouble finding work or living well, as Utah’s unemployment rate is seventh best at 3.1%, as of February 2017. Plus, it has a decent median household income of $58,341. And Utah is the state with the best hospital systems in the nation, according to WalletHub.

6. Colorado

Willow Lake, Colorado

Willow Lake, Colorado |

Scoring just outside the top 10 in both taxes paid and government services, according to WalletHub, Colorado has done quite well supporting its health, economy, and infrastructure. And it scored in the middle of the pack for education and safety.

5. Alaska

landscape in Alaska

Alaska has the lowest taxes per capita. | U.S. Fish and Wildlife Service/Getty Images

WalletHub ranks Alaska as the best in taxes paid per capita, meaning residents get to keep most of their paychecks. However, Alaska is ranked dead last for government services. Despite having the highest crime rate of all 50 states (635.8 per 100,000 residents as of 2014) and the second highest unemployment rate at 6.4%, Alaska still ends up as our fifth best state for taxpayers.

4. Virginia

Charlottesville, Virginia street

Charlottesville, Virginia | Experience Charlottesville via Facebook

Residents of Virginia enjoy the eighth best government services of all 50 states and the 15 lowest in taxes paid per capita. Therefore, it ranks as the No. 4 state for taxpayer return on investment, according to WalletHub. It’s no wonder why Virginia is for lovers. It sees high scores in the safety and education categories. In fact, Virginia ranks in the top three for the lowest crime rates in the U.S.

3. Florida

Tallahassee, Florida

The Sunshine State is the third best state for taxpayers. | Pavone

Besides the abundant sunshine, it remains a mystery as to why retirees flock to Florida to nest in retirement bliss. Florida actually scores quite low for government services — 34th to be exact. But delving deeper, we find the state also advertises some of the worst safety and economic conditions in the country. But it rounds out our top three best states likely because of its low taxes paid per capita.

2. South Dakota

Mount Rushmore

Mount Rushmore, South Dakota | Karen Bleier/AFP/Getty Images

Let’s travel through the rolling prairies to the Black Hills to find our second best state for taxpayers. South Dakota ranks the best in infrastructure and pollution metrics and second in health, according to WalletHub. Residents of this state enjoy low levels of pollution and clean water. Although its schools could use some attention, WalletHub ranks its hospitals fourth in the nation.

1. New Hampshire

New Hampshire scenery

New Hampshire is the best state for taxpayers | Darren McCollester/Getty Images

Coming in at No. 1, New Hampshire wears the biggest crown as the best state for taxpayer return on investment. It has the lowest unemployment rate in the country at 2.7%, as of February 2017. It also places in the top 10 in all of WalletHub’s categories, except for infrastructure and pollution, meaning the government knows how to manage a budget. New Hampshire residents pay the second lowest taxes per capita and see the fifth best in government services.

Next up are the 10 worst states for taxpayer dollars …

That was the good news. But what about the worst states for taxpayers to live? Let’s hope your state doesn’t make the cut.

10. Vermont

University of Vermont

Vermont is the first state on our list of worst taxpayer returns on investment. | University Communications/University of Vermont

Although Vermont residents see a big return on investment in government services — second to only that of Minnesota — they pay through the nose for it. Vermont pays the second highest taxes per capita. As a result of its high tax rates, the state does well in WalletHub’s safety and education categories.

9. Nevada

Reno, Nevada downtown

Reno, Nevada |

Way across the map on the western side of the U.S. we find our ninth worst state for taxpayers. Unlike Vermont, residents in the Silver State experience high amounts of violent crime and some of the worst hospital systems in the country. WalletHub also ranks Nevada at No. 48 for education. To make matters worse, residents of Nevada have a median household income of about $6,000 less than the national average.

8. Wyoming

The sun hits the tips of the Grand Tetons in Wyoming

Grand Tetons, Wyoming | Karen Bleier/AFP/Getty Images

You’d think a state that pays the sixth highest taxes per capita would see a higher return on investment. But that is not the case for residents of Wyoming. It seems their government is most concerned with infrastructure and improving the economy, but the health and education systems are suffering as a result.

7. Delaware

Delaware lighthouse

Residents of Delaware enjoy good school systems. | Eva Hambach/AFP/Getty Images

While Delaware scores in the top five for education, it places second to last in health. It’s also No. 42 in safety. For such a tiny state, it sure does require a lot of tax dollars to fund Delaware’s government. Regardless, it just barely cracks the top 30 for government services.

6. Arkansas

Little Rock, Arkansas

Little Rock, Arkansas | Thinkstock

Arkansas ranks as the sixth worst state for taxpayers. WalletHub cities a high tax rate and dismal return on investment from the government as reasons for its place on this list. It has a high percentage of residents in poverty and scores dismally in health, safety, and the economy.

5. New York

New York traffic

New York City | Michael Nagle/Getty Images

Raise your hand if you’re surprised New York comes in dead last for infrastructure and pollution, according to WalletHub. It’s no shock, as one trip to the Big Apple will confirm any doubts. New York is tied with Oklahoma for worst water quality and ranks 43rd for its hospital systems. But when considering the high residential and tourist population, low rankings in such categories are to be expected.

4. California

California pier

California is known for its traffic. | Youtube/MamaOT

With categorical rankings similar to New York, California rests as the fourth worst state for taxpayers. Residents enjoy a decent health system but poor infrastructure and pollution. Just ask any Californian, and they’ll be more than happy to vent frustrations over their miserable commute times and the constant bumper-to-bumper traffic on the freeway.

3. New Mexico

Albuquerque, New Mexico

Albuquerque, New Mexico | grichenko

New Mexico is ranked 49th in government services, topping only Alaska because of its high infrastructure and pollution score. In other categories — education, safety, and the economy — New Mexico comes in dead last. Therefore, it’s not surprising it has alarmingly high poverty rates, violent crime, and trouble in the school systems. What’s worse is its unemployment rate is the highest nationally at an astounding 6.8%, as of February 2017. So, why isn’t it in the No. 1 slot for worst taxpayer return on investment? Well, it ranks pretty well — in comparison to its counterparts on this list — for the amount of taxes paid per capita in 32nd place.

2. Hawaii

Black beach on Hawaii

Black beach on Hawaii |

Although it’s surrounded by serene beaches and Pacific waves, WalletHub stamps Hawaii with the third worst roads, bridges, and water quality. This is shocking because it pays a lot in state and local taxes. Maybe it’s all that sunshine and vitamin D, but Hawaii does rank high in the health category at No. 7.

1. North Dakota

Fargo, North Dakota

North Dakota residents pay the highest taxes per capita in the country. | Harding

The worst state for taxpayer return on investment is North Dakota. WalletHub lists this state as No. 1 in taxes paid per capita. And though it does see a good return through government services (ranked ninth), it’s still not enough. It’s lurking in the top 15 for every WalletHub category except for education, where it ranks 34th. Unfortunately, those results in all five categories WalletHub analyzed won’t land North Dakota on any “best of” lists anytime soon.

Follow Lauren on Twitter @la_hamer.

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