Not all states are equal in the United States of America, as evidenced by the 25 states that get more in federal payments than taxes paid. Just a few weeks ago, New York Governor Andrew Cuomo bemoaned the fact that despite New York paying more to the federal government than receiving it, the state did not receive adequate government assistance when it was facing the brunt of the coronavirus pandemic. But how true was his statement?
Quite true, actually. Currently, among the 50 states, New York has the worst balance of payments with the federal government, currently at -21.9 billion dollars. If you want to know more about highest tax paying states, head on over to 10 states that give the most money to the federal government. So what does this mean? It means that New York has paid 21.9 billion dollars more to the federal government than it has received in a year, leading to the question; what does the federal government do with the excess money. Why, send it to other states of course! 42 states receive more money from the federal government than they receive. You have to keep in mind that the Federal government spends more money than it receives. Its budget deficit was around $1 trillion in 2019 and is estimated to reach $4 trillion in 2020.
The funny thing is, states that voted for Trump the most are actually more dependent on government welfare than the blue states. Do you think you will hear about this little tidbit on Fox News? I for one, sincerely doubt it. 8 of the 10 most government dependent states, and 19 of the top 25 are actually red states.
Now you might be wondering why other states such as New York agree to pay high taxes when they aren’t getting as much in return, while other states get greater welfare. Can’t they refuse to pay taxes or at least pay less taxes? Perhaps the most recent example of this is, when in 2017, California suggested not paying federal taxes after Trump threatened to withhold federal aid from states supporting sanctuaries (cities who restrict their coordination with the federal government against illegal immigrants). However, it isn’t legally possible.
To determine our list of states which receive more federal money than they pay, we went with the Rockafeller Institute’s report on the same, ranking each state not just by the overall balance of payments but also the balance of payments per capita, therefore achieving a more accurate ranking than would have been displayed on the basis of just one criterion. So let’s take a look at which states are the most dependent on the federal government starting with number 25:
Total balance of payments (in millions of dollars): $14,595
Total balance of payments per capita: $2,181