Associate Professor of Sociology at the City University of New York, Queens College

Research Note

Federal Redistribution between U.S. States, 2018

Which states benefit from federal government redistribution?
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This analysis examines how federal taxation and expenditures result in net inflows or outflows to difference U.S. states. The analysis uses our Data on U.S. Federal Balance of Payments, 2018 data set. Figure 1 (below) describes these inter-state money flows resulting from federal policies. A table with presice estimates are also presented at the end of this post..

Per Capita Federal Balance of Payments by State, 2018

The data suggests that six (maybe seven) states transferred considerable income to other states in 2018: New Jersey, Massachusetts, New York, Minnesota, Illinois, and California. An addition six states are within $500 in per capita transfers. The majority of U.S. states receive thousands of dollars in per capita transfers from our six “donor states”. These differences are examined through data and analyses detailed in my Federal Redistribution project materials. They describe how a great deal of this redistribution is the result of more tax payments from states that house the metro areas containing the country’s higher income households and businesses. However, there is also inequality in federal spending that is less rooted in the prevalence of poverty or some other need for redistribution, and more in smaller states’ use of political power within our union.

Appendix: Per Capita Balance of Payments by State, 2018

StatePer Capita
Balance of Payment
New Mexico10671
Mississippi8939
Alaska8727
West Virginia8536
Virginia8189
Maryland7474
Alabama7369
Kentucky6694
Hawaii6494
Vermont6402
Maine5647
South Carolina5139
Arkansas4763
Missouri4760
Louisiana4615
Oklahoma4580
Montana4552
Arizona4497
Idaho3641
Tennessee3514
North Carolina2926
Rhode Island2672
Pennsylvania2658
Ohio2606
Michigan2470
Indiana2193
Florida2179
Georgia2143
Oregon2120
Kansas1600
Nebraska1466
Iowa1313
Wyoming1171
North Dakota1157
Texas867
Nevada860
Delaware756
Wisconsin581
Colorado342
Washington340
New Hampshire304
South Dakota242
Utah199
Connecticut-126
California-530
Illinois-891
Minnesota-1163
New York-1363
Massachusetts-1419
New Jersey-2792

Photo Credit. Henle, Fritz, photographer. Las Vegas, Nevada. Transmission towers and transformers redistributing power from Boulder Dam to Basic Magnesium Incorporated, which produces huge quantities of the lightest of all metals for aircraft and other wartime manufacturing. Dec. Photograph. Retrieved from the Library of Congress, <www.loc.gov/item/2017866539/>.

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