11 states pay more in federal taxes than they get back - here's how every state fares
Justin Setterfield / Getty
- 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.
- The majority of states receive more in federal services than what they pay in federal taxes, but 11 states, including California and New Jersey, spend more than they receive.
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. But in some states, some taxpayers are left spending more in taxes than what they receive back in federal services.Advertisement
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.We described the difference as the balance of payments. For example, California's balance of payments is -$13.7 billion. This means California residents get less in return than they pay for. However, Iowa has a balance of payments of $2.5 billion, meaning Iowa residents receive $2.5 billion more in federal services than what they pay in taxes.
The difference per capita means how much the average state resident received in federal services versus what they paid in federal taxes. In California, each resident is sending in $348 more than they get back. In Iowa, each resident is receiving $797 more back in federal services than they paid in taxes.The majority of states received more in federal services than what they pay in federal taxes.Below, see how each state fares.Advertisement
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