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Which States Receive More in Federal Benefits Than They Pay in Taxes? Red Ones!
Which States Receive More in Federal Benefits Than They Pay in Taxes? Red Ones!
Which States Receive More in Federal Benefits Than They Pay in Taxes? Red Ones!
Where Your Tax Dollars Go: These States Are Most Dependent on the Federal Government [1]
Where Your Tax Dollars Go: These States Are Most Dependent on the Federal Government. In 2022, the federal government spent $6.27 trillion1
Though taxes are mostly collected by the federal government, individual states are primary recipients of that same tax revenue. In a way, tax inflows and outflows act as a form of wealth redistribution among U.S
The top one percent of earners paid about 42% of the income tax revenue in the United States. This accounts for 10% of the government’s total federal tax revenue
States Most Dependent on the Federal Government [2]
Billions of dollars are at stake each year for individual states when lawmakers in Washington D.C. For 2023, President Biden is calling for a 7% increase in federal spending as part of his $5.8 trillion budget proposal
For example, Wyoming gets over 56% of its revenue from federal sources, but only 27% of Hawaii’s revenue comes from the federal faucet. With this in mind, SmartAsset took a closer look at individual states to determine which ones are most dependent on the federal government.
For details on our data sources and how we put all the information together to create our final rankings, read the Data and Methodology section below.. This is SmartAsset’s third annual study on the states most dependent on the federal government
The States That Are Most Reliant on Federal Aid [3]
As Americans head to the polls — or the mail-in ballot drop boxes — voters will weigh in on their own state’s financial health based on who they elect in state, local and federal elections.. To put states’ financial health — and the potential impact on residents of those states — into context, MoneyGeek analyzed and ranked states according to their dependence on the federal government
– 7 of the 10 states most dependent on the federal government were Republican-voting, with the average red state receiving $1.05 per dollar spent.. – Twenty-nine states sent more to the federal government than they received, compared to just nine states in 2021.
– New Mexico had the highest return on federal spending of any state ($3.69), and Delaware had the lowest ($0.32).. that were most dependent on the federal government in 2022, MoneyGeek analyzed the return on taxes sent to the federal government and the percent of each state’s revenue provided by the federal government
Which states rely the most on federal aid? [4]
In 2020, the US government provided over $1 trillion to state and local governments through federal grants after adjusting for inflation.[1] These grants made up a quarter of states’ total revenues, funding various essential programs like healthcare, education, social services, infrastructure, and public safety.. Federal aid to state and local governments has risen since 2020 due to the pandemic’s impact on healthcare and social programs.
Federal assistance for various state programs is typically allocated through grants.. Of the more than $1.2 trillion the federal government granted to states in 2022, most went toward health-care programs.
The federal government uses a blueprint to calculate formula grants for each state or locality. This formula typically considers factors such as population size, poverty rates, or specific needs of the area.
Which US States Get More Than They Give [5]
states are not equal when it comes to how much tax revenue they send to the federal government.. The states that keep the government solvent are the ones where taxpayers contribute more than they get back
The four states produce almost 17 percent of all federal receipts, despite being home to just 11.8 percent of the U.S. “As long as the high income earners remain in the Northeast, these states will continue to have a negative balance of payments,” Laura Schultz of the State University of New York (SUNY) Rockefeller Institute of Government, told VOA via email.
The report examined revenue and spending data for 2016 and developed a preliminary assessment for 2017.. Virginia, Kentucky, New Mexico and West Virginia get the most back from the federal government, raking in far more than they contribute.
Donor States [Updated August 2023] [6]
Each state collects a myriad of taxes from its residents, but the ones residents of all states pay are federal income taxes. It makes sense then that states with more residents, specifically more high earners, will pay more to the collective in income taxes than they take, and because of this, we have “donor states.”
The Tax Foundation says that “84 percent of federal individual income taxes—which account for over 40 percent of federal revenue—are paid by those in the top 25 percent of the income distribution. The majority of these taxpayers live in wealthy, urban, politically “blue” areas like New York, California, and Massachusetts.”
To account for this change, we included both the 2019 and the 2020 Federal Fiscal Year data sets with each state’s total receipts, expenditures, and balance of payments.. In this context, receipts are what the state government receives in federal funding, expenditures are what the state contributes in income taxes, and the balance of payment is the expenditures minus the receipts
The Week in Public Finance: The 10 States That Give More to the Feds Than They Get Back [7]
The Week in Public Finance: The 10 States That Give More to the Feds Than They Get Back. Connecticut tops the list of states whose taxpayers receive the least bang for their buck from the feds.
Residents in Connecticut, Massachusetts, New Jersey and New York have some of the highest tax bills in the nation. They also pay thousands more in federal taxes than their state receives back in federal funding
North Dakota, Illinois, New Hampshire, Washington state, Nebraska and Colorado round out the list.. Among the top four, the negative balance ranges from $1,792 per capita in New York to a whopping $4,000 in Connecticut, according to a new report by the Rockefeller Institute of Government
Alabama gets $2.17 for every $1 paid in federal taxes, report states [8]
What Alabama gets from the federal government – in comparison to what it pays in taxes – is being used by the New York State comptroller’s office to illustrate a point of contention with Washington.. According to a report out today from the office, New Yorkers paid $23.7 billion more in federal taxes than the state received in federal spending in the 2019 fiscal year.
New Mexico receives $2.83 for every tax dollar paid, followed by Mississippi at $2.50 and West Virginia at $2.43. Alabama comes next, with $2.17 for every dollar paid.
The Empire State’s taxpayers send billions of dollars more to Washington than it gets back from the federal government, the report says. And unless more relief comes, the state, local governments, and other government entities will be forced to cut essential services, raise taxes and fees, or borrow to meet needs.
So, with all the Republican animus toward the federal government, you might think that red states get less than their fair share from Uncle Sam — that they pay a lot in taxes and get fewer benefits in return than blue states. A study by the Rockefeller Institute of Government found that traditional Democratic states contributed significantly more federal taxes per citizen than Republican states
And for some red states: Mississippi ($5,740), West Virginia ($6,349), Kentucky ($6,626) and South Carolina ($6,665).. And yet, these same Republican states receive far more in federal dollar expenditures than they contribute in taxes
Florida, a Republican state, received $1.24 for every dollar it paid in federal taxes.. Red states, on average, rank significantly higher than blue states when it comes to freeloading off other states
11 states pay more in federal taxes than they get back — here’s how every state fares [10]
– A portion of federal tax money is sent back to states to spend on resources.. – We looked at the monetary difference between how much taxpayers pay to the federal government and what they receive back in federal services.
You get what you pay for — but that may not always be the case when it comes to federal taxes.. A lot of federal tax money is immediately rerouted back to the states in the form of grants, which the state uses to spend on resources
Consulting a report by the Office of the New York State Comptroller, we took a look at the monetary difference between how much taxpayers pay to the federal government and the benefits they receive in return for each state and Washington, DC.. The report examines the flow of funds between the federal government and each state for the federal fiscal year that ended on September 30, 2017, based on data from federal budget documents, the IRS, the US Census Bureau, and other sources.
State bailouts and federal spending: Which states give, and which receive? [11]
State bailouts and federal spending: Which states give, and which receive?. Washington — The coronavirus crisis and the economic devastation it has wrought has opened up a divide between Democratic governors and Republicans in Congress over federal assistance to states in the next government relief package, with some GOP lawmakers arguing taxpayer dollars should not be used to rescue states whose fiscal issues have been exacerbated by the pandemic.
A subsequent press release from McConnell’s office highlighting the remarks framed the idea of federal aid flowing to states as “blue state bailouts,” since many of those hardest hit are led by Democratic governors.. The comment prompted a fierce rebuke from New York Governor Andrew Cuomo, a Democrat who said New York contributes far more to federal coffers than Kentucky, which in turn receives significant sums of federal support.
His state takes out more than it puts in,” Cuomo said during a press conference. “Senator McConnell, who’s getting bailed out here? It’s your state that is living on the money that we generate
No, ‘blue states’ do not bail out ‘red states’ [12]
The COVID-19 pandemic and resulting economic shutdown have wreaked havoc on state budgets. Andrew Cuomo and Illinois Senate President Don Harmon, have urged Congress for an injection of federal funds to save state finances
Progressives glibly replied that it is actually “blue states” that bail out “red states.” This sophomoric switcheroo gets more than its fair play in the media but rests on several false equivalencies and bad logic.. Those arguing that “blue states” are the ones bailing out “red states” point to the federal “balance of payment” ratios, or federal tax dollars collected compared to federal money received, on a state-by-state basis
The states with the highest balance of payments (receiving more federal funds than they collect in federal taxes) are Kentucky, New Mexico, Mississippi and West Virginia. Therefore, “blue states” are bailing out “red states” — or so they say.
Zirpoli: The states that are givers and takers of federal dollars may surprise [13]
Senate Majority Leader Mitch McConnell of Kentucky is concerned about “bailing out” states who are deeply in debt due to the costs associated with COVID-19. In particular, he stated that he is concerned about “blue state bailouts.” But McConnell may regret drawing attention to this issue
The myth of traditionally Democratic states needing to be “propped up” as former Republican House Speaker Paul Ryan once stated, is a topic that Republicans leading states may want to shy away from. The same goes for the recent statement from Treasury Secretary Steven Mnuchin when he said, “We are getting the federal government out of the business of subsidizing states.” I hope Mnuchin checked with Sen
A 2017 study by the Rockefeller Institute of Government found that traditional blue states like Connecticut ($15,643), Massachusetts ($13,582), New Jersey ($13,137), New York ($12,820), and California ($10,510), contributed significantly more in federal taxes, per citizen, than traditional red states like Mississippi ($5,740), West Virginia ($6,349), Kentucky ($6,626), and South Carolina ($6,665).. Not only do some states contribute more to the federal budget than others, but some also receive less from the federal government in return
Federal taxation and spending by state [14]
The ability of the United States government to tax and spend in specific regions has large implications to economic activity and performance. Taxes are indexed to wages and profits and therefore areas of high taxation are correlated with areas of higher per capita income and more economic activity.
The ability of the government to tax and spend in specific regions has large implications to economic activity and performance. The main question behind this issue stems into three different approaches
Second, it should be redistributive, meaning rich states should be taxed most heavily and poorer states should receive more benefits. Third, spending and taxation should be accidental per se, meaning higher taxation should be performed based on income but with little relation to geographic region and spending should be done where it allows for the most efficiency
U.S. Treasury Fiscal Data [15]
Government revenue is income received from taxes and other sources to pay for government expenditures. government has collected $NaN billion in fiscal year .
Compared to the federal revenue of $0 billion for the same period last year (Oct -1 – Invalid Date null) federal revenue has by $0 billion.. government are individual and corporate taxes, and taxes that are dedicated to funding Social Security and Medicare
In addition to taxes, government revenue also comes from customs duties, leases of government-owned land and buildings, the sale of natural resources, various usage and licensing fees, and payments to federal agencies like the U.S. Federal revenue is commonly compared to gross domestic product (GDP)
Federal Tax Dollars Paid And Received By Each State, Mapped [16]
Federal Tax Dollars Paid And Received By Each State, Mapped. Last year the Federal government’s spending was more than $6 trillion, and it has already surpassed $2 trillion this year
Each US state offers its own local tax system and nine states don’t impose one.. To determine which states rely on the most federal tax revenue, SmartAsset crunched the federal government’s numbers on different tax types, classified as gross receipts, and looked at where they were going
Only New Mexico received a higher share of the federal government revenue than its income tax collections, whereas the biggest disparity between federal tax contributions and assistance received was faced by Minnesota taxpayers, who contributed around $6 in tax payments for every dollar received in support.. Taxpayers in West Virginia, Alaska, Mississippi, Montana, Hawaii, Vermont, Louisiana, Alabama, Wyoming and Maine were all paying $1 or less in state taxes for every dollar received back from the federal share.
Fact Check: Do Only Trump Voting States Receive More Than They Pay in Tax? [17]
Republicans have given the Biden Administration little support for introducing tax or spending measures recently, rallying against both the Inflation Reduction Act Bill and the American Rescue Plan.. While the GOP’s fiscal conservatism won’t make front page news, some are noting a gap between what red states traditionally pay to the federal government versus what they spend, suggesting that it’s Republican territories who get more money.
Newsweek went to find out if the former president’s heartlands were the biggest beneficiaries.. A tweet posted on September 20, 2022, which has received more than 62,000 engagements, said that “every single state that voted for Donald Trump receives more money from the federal government than it contributes
Iterations of this claim focussing around federal dependence of different states have been shared on Twitter, Reddit and other platforms before.. “GOP swindlers ought to hush re Dems and handouts! Dem-led states pay more to the fed govt than they get
Which States Are Givers and Which Are Takers? [18]
And is that even the correct way to frame the question?. Maps showing regional differences among Americans are all the rage these days, such as this depiction of the contours of baseball fandom, or this one of the beers we’re alleged to favor, or this showing the places in America where none of us lives, or this creative video/map showing where Americans use different words for common things such as soda.
Analysts there set out to determine how states compare in terms of their reliance on federal funding.. The WalletHub analysts essentially asked how much each state receives back as a return on its federal income-tax investment
The third measure received only half the weight of each of the others in the calculation.. What the resulting map shows is that the most “dependent states,” as measured by the composite score, are Mississippi and New Mexico, each of which gets back about $3 in federal spending for every dollar they send to the federal treasury in taxes
Federal Government Uses North’s and Midwest’s Dollars to Aid the South, Study Says [19]
Federal Government Uses North’s and Midwest’s Dollars to Aid the South, Study Says. Many states in the Northeast and the Middle West pay more in Federal taxes than they receive in Federal spending, while many Southern states are subsidized by the Federal Government, a new study shows.
New Mexico, Virginia and Mississippi had the biggest surpluses, receiving far more in Federal outlays than they paid in Federal taxes.. The study, by researchers at the Kennedy School of Government at Harvard University, said that Connecticut’s tax payments to the Federal Government exceeded Federal spending in the state by an average of $2,099 for each resident last year
The report, issued by Senator Daniel Patrick Moynihan, Democrat of New York, concludes that ”the Federal Government is a major force in the geographic distribution of economic activity,” though sometimes in ways that were not foreseen or intended.. The study measures the ”balance of payments” for each state, defined as the difference between the Federal spending it receives and the taxes it pays.
Sources
- https://finance.yahoo.com/news/where-tax-dollars-states-most-142938519.html#:~:text=Minnesota%2C%20New%20Jersey%2C%20Delaware%2C,received%20from%20the%20federal%20government.
- https://smartasset.com/data-studies/states-most-dependent-on-the-federal-government-2022
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- https://www.baltimoresun.com/maryland/carroll/opinion/cc-op-zirpoli-050620-20200506-7ya7okjfk5btdpysnrnrfouyz4-story.html
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- https://digg.com/finance/link/states-most-dependent-on-the-federal-government-ranked-59CWzbWb10
- https://www.newsweek.com/fact-check-do-only-trump-voting-states-receive-more-they-pay-tax-1745433
- https://www.theatlantic.com/business/archive/2014/05/which-states-are-givers-and-which-are-takers/361668/
- https://www.nytimes.com/1996/10/08/us/federal-government-uses-north-s-midwest-s-dollars-aid-south-study-says.html
