States Getting the Most and Least From Uncle Sam
Every year, workers in all 50 states fill out their 1040 form to pay taxes to the federal government. That money does not necessarily stay in Washington, however. The federal government generates revenue from sources like income and employment taxes and redistributes it based on need. And not all states benefit equally.
The total amount the federal government collected from each state in the 2017 fiscal year ranged from $5.6 billion from Vermont to $435.6 billion from California. The majority of states — including Vermont and California — ultimately get more money back than they contribute. Money from the federal government is redistributed back to states in the form of grants, aid programs for the needy, and payments to major government contracting firms such as defense companies.
A recent report from public policy think tank the Rockefeller Institute of Government titled “Giving or Getting? New York’s Balance of Payments with the Federal Government,” highlights the differences in what states give to the federal government compared to what they receive. 24/7 Wall St. reviewed the report in addition to Census data to identify the states getting the most and least from Uncle Sam. States were ranked based on the amount of money they received per capita from the federal government in fiscal 2017 minus the amount residents and organizations paid the federal government per capita.
The states receiving the most from Washington on a per capita basis tend have relatively large poor populations that depend on federal assistance programs like SNAP (formerly known as food stamps) and Medicaid. On the flip side, the states that give more to the federal government than they receive tend to have higher income residents. Exceptions include states like Maryland and Virginia, which, though they are wealthier states, also benefit from disproportionately high federal funding partly due to their large defense contracting sectors.