So what does the report say about West Virginia? The state ranked 46th of 51 (D.C. was included) in return on taxpayer money. The good news is that the tax rate rank is not oppressive. West Virginia was ranked 18th, top 35%, in terms of how much taxes its citizens pay annually. Wallethub estimated that the average West Virginian pays $6,598 annually in taxes, which is 5% below the national average. The bad news is that our overall government services rank 47th, according to this organization.
There are a few graphics that break down the metrics by government service. West Virginia is featured in two of them.
However, there is a bigger point to be drawn from this report. Could West Virginia improve its quality of public services by increasing or reducing the tax rate? Given that the state already collects below the national average in taxes, one might say that raising the tax rate to the national average or beyond could give the government more resources with which to improve health services, reduce crime, or build infrastructure. This makes good sense, but the state by state picture muddies this clear reasoning a bit.
West Virginia would hope to move downward on the above graph. That would indicate better public services. The trend line would indicate that increasing taxes marginally would help that. However, the chart shows plenty of states with low taxes and high government service rates. Look at the cluster of five states in the lower left hand corner that rank in the top ten in low tax rates and in the top twenty in government services. Those states are: Wyoming, South Dakota, North Dakota, Washington, and Colorado. Of those states, South Dakota, Washington, and Wyoming have no income taxes. On the other end of the spectrum, the state with the highest tax rate rank, New York, has the 25th best public services. So New York has high tax rates and is in the middle in terms of services. California has the second highest tax rate rank and is 38th in public provisions.
Complicating the relationship further are states with high tax rates and highly rated government services. Iowa, Nebraska, and Vermont all rank in the top ten highest tax rates and provide top ten quality public services. All three states have a progressive income tax that is steeper than West Virginia's.
So what is the lesson from all this data? Should West Virginia lower or increase tax rates? And if so, which ones should it lower or raise? The main moral seems to be that rates are not as important as quality decision making. The efficiency with which a state government spends money is more important than the amount collected. Finding cost effective ways to improve infrastructure, schools, air and water quality, and health services is the best route. That is easier said than done though. Building bridges or hospitals takes money. Increasing safety requires better training or more officers or both. And improving education starts with better teachers and teacher training. It requires as much dedication from the populace to provide these services as it does the state to facilitate them. Teachers and police officers taking pride in their work and looking for innovative ways to improve their community are just as important as the politicians hoping to effectively parse through the tax code.