Saturday, January 09, 2016

Which states are the biggest suckers on the federal teat?

2015’s States Most & Least Dependent on the Federal Government

by John S Kiernan, WalletHub

The extent to which the average American’s tax burden varies based on his or her state of residence represents a significant point of differentiation between state economies. But it’s only one piece of the puzzle.

What if, for example, a particular state can afford not to tax its residents at high rates because it receives disproportionately more funding from the federal government than states with apparently oppressive tax codes? That would change the narrative significantly, revealing federal dependence where bold, efficient stewardship was once thought to preside.

The idea of the American freeloader burst into the public consciousness when #47percent started trending on Twitter. And while the notion is senselessly insulting to millions of hardworking Americans, it is true that some states receive a far higher return on their federal income tax contributions than others.

Just how pronounced is this disparity, and to what extent does it alter our perception of state and local tax rates around the country? WalletHub sought to answer those questions by comparing the 50 states in terms of four key metrics. Our findings, as well as expert commentary and a detailed methodology, can be found below.

(Charts and maps here.)


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