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Texas Has Some Of The Best Tax Investment Returns In The US

The state ranked 5th for ROI
Photo: chayanuphol | Shutterstock

Tax day is something many Americans dread every year, but some states get a better bang for their buck — Texas being one of them. The state ranked fifth for the best ROI in the U.S. 

According to a recent study by WalletHub, different states have different tax burdens — begging the question of whether people in high-tax states receive superior government services, and if low-tax states receive low-quality services. 

The study found that Texas is home to the fifth-best state for taxpayer return on investment (ROI). ROI is a ratio calculated to determine how much profit is being made on a particular investment over a period of time, usually during the tax season. It measures the performance and the efficacy of an investment — the lower the number the better. 

Data used to create the ranking was collected from the U.S. Census Bureau, Bureau of Labor Statistics, National Center for Education Statistics and others.  

The state was also ranked fourth for total taxes per capita, 16th for the economy, 32nd for infrastructure and pollution, 37th for education and 38th for health and safety. Overall, the state faires well with only a few ahead of it. 

In first place was New Hampshire, with Florida, Alaska and South Dakota following. A first-place rank represents the lowest total taxes paid per capita and the best government services, respectively.

WalletHub used 29 metrics to compare the quality and efficiency of state-government services across five categories — education, health, safety, economy, and infrastructure and pollution — taking into account the drastically different rates at which citizens are taxed in each state.

WalletHub also reported that federal income-tax rates are uniform across the nation, yet some states receive far more federal funding than others. In fact, 73% of people think the government doesn’t spend its tax dollars wisely. In this study, Texas ranked 29th for the most federally dependent states.