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..
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
Balance of Payment
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/>.