Businesses and individuals often attempt to get out of paying taxes through any legal means. Sometimes, what organizations believe are legal means actually tread on gray areas, resulting in run ins with tax law. For Texans, paying some taxes brings a high level of return on investment, says a new report from WalletHub.
The report ranked states according to an number of factors, including how much taxes were paid to state and local agencies and what type of government services were provided by states or local government. Texas ranked right in the middle when it comes to government services, ringing in at 24th in a list of 50 states and Washington, D.C. Because of Texas’s relatively low tax structure, however, it tied for seventh with another state when it came to overall return on taxpayer investment.
The report rated how Texas public services ranked in a variety of ares. For pollution, infrastructure, and safety, the state ranked in the bottom half. Texas ranked 17th for educational services, 14th for public healthcare and 10th for economy, bringing up its overall score.
Some experts opine that the lack of a state income tax in Texas could be why it didn’t take higher honors in some areas. The state relies on other income streams, including a robust sales tax revenue, to fund programs instead. Other experts say state income tax isn’t a predictor of success, especially since the top four ranking states don’t collect income taxes.
For many, state and local taxes are political in nature, and individuals and businesses don’t always agree on how taxes are collected are used. Regardless, tax laws apply to everyone and it’s important to understand them, keep up with changes and make timely payments to avoid tax litigation woes.
Source: Dallas Business Journal, “Texas ranks seventh in the nation for taxpayer return on investment” Korri Kezar, Jun. 10, 2014