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Which US states receive the least federal spending per dollar of federal taxes paid?
Executive summary
Available public datasets and analyses show that “least federal spending per dollar of federal taxes paid” is usually reported as a state-level ratio — often called “return on taxes paid” or “balance of payments” — and different organizations produce different rankings depending on methodology (for example, WalletHub, MoneyGeek, World Population Review and state-level portals) [1] [2] [3]. Major primary data sources for these calculations include USAFacts/IRS collections, Treasury and BEA spending data, and detailed federal outlays by state on USASpending or the Treasury’s Fiscal Data portal; secondary sites report that states such as Delaware, California and other high-income “donor” states often receive less back per dollar paid, while states like New Mexico, Alaska and many smaller or lower-income states tend to receive more per dollar [2] [1] [4] [3].
1. What analysts measure and why it matters
Analysts typically compute a “return on taxes paid” by dividing federal spending received by a state (grants, contracts, direct payments, federal salaries, etc.) by federal taxes collected from that state; this yields a per‑dollar or per‑resident ratio that can label a state as a “donor” (gets less back than it pays) or “recipient” (gets more back) [1] [2]. The ratio is a blunt instrument: it mixes different program types (Social Security/Medicare, defense contracts, grants, disaster aid) and doesn’t reveal who benefits within a state, the economic multiplier of spending, or whether the distribution reflects policy choices (defense bases, federal agencies located nearby, or disaster exposure) [5] [6].
2. Which states show up at the bottom of common lists
Recent secondary analyses cited in the available search results place Delaware and California among the lowest “returns” in some studies, while WalletHub and World Population Review flag high-income states and “donor” states more broadly as returning less per tax dollar; World Population Review and WalletHub identify states like Virginia and New York as large net donors in dollar terms but the per‑dollar list can shift depending on the metric used (return per tax dollar, per‑capita balance, or share of state revenue from federal funds) [1] [4] [3]. MoneyGeek’s 2024 snapshot explicitly named Delaware as lowest ($0.46 received per $1 paid) and New Mexico as highest ($3.42 per $1) in their model, illustrating how a pair of states can anchor opposite ends of the distribution [2].
3. Why different sources disagree — methodology matters
Different outlets use different inputs and weights. WalletHub combined three metrics — return on taxes, share of federal jobs, and federal funding as a share of state revenue — to rank dependence; MoneyGeek, WalletHub and World Population Review rely on BEA/IRS/USASpending aggregates but apply different year ranges, per‑capita adjustments, or whether they include Medicaid, retirement transfers, or defense contracting [1] [2] [3]. The Rockefeller Institute’s “Balance of Payments Portal” and Treasury’s Fiscal Data provide primary figures analysts can and do reinterpret, which is why rankings move when you change the definition [7] [8].
4. Limitations and what the raw sources actually provide
Primary government sources — Treasury’s Fiscal Data, USASpending, BEA government receipts and expenditures and IRS collections — offer raw spending and revenue figures by program and (in many cases) by state, but they do not publish a single authoritative “return per dollar” ranking; that is derived by independent analysts and think tanks from these primary datasets [8] [9] [10]. The Congressional Budget or CBPP backgrounders emphasize that total federal spending has many components (entitlements, defense, interest) that aren’t evenly distributed by geography, which complicates any fairness judgment [5].
5. How to get a definitive, replicable answer for your question
To produce a defensible list you must (a) pick a specific federal fiscal year and data source[11] (Treasury/USAFacts/BEA/IRS/USASpending), (b) decide which spending flows to include (e.g., include or exclude nationwide entitlement outlays like Social Security/Medicare), and (c) compute received dollars divided by taxes collected (or per‑capita versions) — then disclose those choices. The Rockefeller Institute’s portal and Treasury Fiscal Data are starting points to replicate or audit any ranking because they expose the baseline transactions that analysts reweight [7] [8].
6. Bottom line for readers and policymakers
There is no single, universally accepted list in the public record posted here; secondary lists consistently find wealthier states (and small, high‑income states) among the “least returned” per dollar paid and poorer or strategically important states among the “most returned,” but exact placements depend on methodology [1] [2] [4] [3]. If you want a precise, reproducible ranking for a particular year and treatment of entitlements versus discretionary spending, use Treasury/BEA/IRS raw data as your inputs and be explicit about inclusion rules so others can replicate your result [8] [10] [9].