Federal Taxes Paid vs. Spending Received by State

Produced in 2007, this highly-cited study tabulates the state-by-state burden of all categories of federal taxes, comparing it to the flow of federal spending back to each state, bringing the two sides of federal fiscal operations together. Thanks to a steeply progressive federal income tax, states with higher incomes pay vastly higher federal taxes, payments that are unlikely ever to be matched by federal spending directed to those states. Ironically, most of these high-paying states are the so-called blue states.  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.

The 2005 data are the most recent we have available on this topic. (We are currently seeking funding to update this study.) If you would like to be notified when a new version of this study is published, sign up for an email update here.

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