Federal Taxes Paid vs. Spending Received by State
States send federal taxes to Washington and receive federal spending in return. However, some states benefit more from federal taxing and spending policies than others. Some "beneficiary" states receive a positive return from Uncle Sam, making other states "donors" who pick up the tab. The most important factor determining whether a state is a net beneficiary is per capita income. States with wealthier residents pay higher federal taxes per capita thanks to the progressive structure of the income tax. Other factors include whether states have powerful Members of Congress, the number of federal employees present in a state, and the number of residents receiving Social Security, Medicare and other federal entitlements.
Additional questions about federal taxes paid vs. spending received by state? Contact Bill Ahern at (202) 464-5101.
Related Blog Entries
- Farm Bill Debacle Update: Denver Post and Sen. Salazar Don't Understand Adjusted Gross Income, by Gerald Prante, May 17, 2008
- AP Report Greatly Exaggerates Washington, DC Tax Burden, by Curtis S. Dubay, October 15, 2007
- AP Publishes Misleading Analysis of Census Data on Federal Taxing and Spending, by Curtis S. Dubay, October 15, 2007
- Total Federal Tax Burdens by County, Congressional District, and Major City Area, by Gerald Prante, March 22, 2007
- Pennies of Each Federal Spending Dollar, by Andrew Chamberlain, April 7, 2006
- Why Do Some States Feast on Federal Spending, Not Others?, by Andrew Chamberlain, March 16, 2006
- One Influential Member of Congress Gets the Picture, by Gerald Prante, September 21, 2005
- Do Driving States Subsidize Walking States?, by Andrew Chamberlain, May 18, 2005
