Maine ranks 19th for rate of return for federal dollars: Report

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Maine ranks 19th out of the 50 states when it comes to taxpayer rate of return, according to a new analysis.

The Pine Tree State is also ranked 13th in overall government services, according to personal finance website WalletHub’s Best & Worst Taxpayer Return on Investment for 2021 report.

“Tax Day can be a painful reminder of how much we have to invest in federal, state and local governments, though many of us are unaware of exactly what they give us in return,” WalletHub managing editor John Kiernan said in the report. “As a result, this creates a disconnect in the minds of taxpayers between the amount of money we should fork over on Tax Day (May 17 this year) – and how much we deserve in return.”

WalletHub compared the 50 states across the areas of health, safety, education, economy and infrastructure and pollution.

“Government services themselves are extremely broad including everything from education and infrastructure to parks and police/fire protection,” said Jeremy Jackson, director of the NDSU Center for the Study of Public Choice and Private Enterprise (PCPE) and a professor in the NDSU Department of Agribusiness and Applied Economics. “Each city and state offers a different bundle of government services and charges a set of taxes and fees to finance them. It is this combination of the bundle of services offered and the associated costs that generate value to citizens.”

Jackson said in the report it can be difficult to assess the rate of investment of tax dollars in part due to the complexity of the tax code.

“Government services in your city are likely funded by a mix of city, county, state, and federal tax dollars,” he said. “… This makes it difficult to know what your total tax burden is. Then there is the difficulty of knowing just what the money you are handing over to the local government is actually being spent on.”

WalletHub’s Taxpayer Survey indicates that 222 million Americans think the government does not spend taxes wisely, especially during the COVID-19 pandemic.

The report indicated that taxpayers ranked higher in Republican-leaning states than in Democrat-leaning states with New Hampshire giving the best return and Hawaii the lowest, with blue states overall getting a 21.20% rate compared to Red states at 29.80%.

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