In 2023, some U.S. states contributed more to the federal government than they received in return, a trend that has persisted for several years. These “donor states” include high-income and high-population areas such as New York, California, and New Jersey. Conversely, other states, particularly those with lower incomes and higher poverty rates, tend to receive more federal spending than they contribute.
This imbalance has sparked debates about fiscal fairness and the effectiveness of federal resource allocation. Understanding which states are net contributors can shed light on the broader dynamics of federal taxation and spending. The following list highlights the 13 states that consistently pay more to the federal government than they receive back.
New York
New York leads the nation in net federal tax contributions. In 2023, it sent over $89 billion more to Washington than it received in return. High personal incomes, a robust financial sector, and corporate tax revenues contribute to this imbalance.
According to USAFacts and Tax Foundation analyses, New York receives only $0.91 for every $1.00 it pays. State leaders often challenge federal tax policies such as the SALT deduction cap, which disproportionately impacts New Yorkers.
California
California ranks second in absolute tax contributions, generating a net deficit of $68 billion in 2023. Its high-income earners and booming tech sector contribute a massive share of national income tax revenue. The federal government returns only **$0.94 per $1.00 to the state, primarily due to less per-capita reliance on welfare programs.
Despite frequent natural disasters, California receives proportionally less FEMA funding per capita than lower-tax red states. Economists warn that such an imbalance reduces the incentive for public investment in high-output states.
New Jersey
New Jersey consistently ranks among the highest net contributors. It contributes significantly due to high personal incomes, a dense corporate presence, and high real estate values.
Residents receive just $0.81 for every $1.00 paid, the lowest return among all 50 states. The Urban Institute attributes this to limited military spending and fewer federal employment contracts. Experts in state finance refer to this as “structural fiscal leakage,” which strains state budgets.
Massachusetts
Massachusetts remains one of the most educated and economically productive states, contributing much more in taxes than it receives. In 2022, the state saw a net deficit of $4,846 per person, according to Axios Boston and USAFacts.
Only $0.86 per $1.00 returns to Massachusetts taxpayers. Strong income tax receipts and minimal reliance on Medicaid or SNAP lower its federal intake. Policy researchers at Brookings describe this trend as a tax-surplus penalty on knowledge economies.
Connecticut
Connecticut taxpayers face one of the highest tax burdens in the country and receive significantly less in tax refunds. In 2023, the state contributed more than it received in revenue, primarily because the top 1% income bracket generated federal revenue.
Federal spending on programs like SNAP and Medicare remains lower than the national average. Defense spending rarely flows into the state despite its proximity to Washington. Economic analysts argue that this long-standing pattern shortchanges states that anchor the national economy.
Illinois
Illinois maintains a strong industrial and commercial base, paying much more to the federal treasury than it receives. The latest fiscal data show that for every dollar spent in federal taxes, the state receives only $0.93.
Lower defense procurement and below-average federal land ownership keep spending levels down. Lawmakers face increasing pressure to lobby for higher federal returns. Meanwhile, federal taxation continues to draw heavily from the Chicago metro’s business and finance sectors.
Washington
Washington state consistently overpays into the federal system. With a robust tech economy and high per-capita income, Washington sent significantly more tax revenue to D.C. than it brought home in 2023.
Amazon, Microsoft, and other corporations headquartered in the state increase the state’s tax burden. Meanwhile, Washington receives reduced federal aid due to limited rural development grants and low reliance on agricultural subsidies. This imbalance persists despite growing infrastructure demands across Puget Sound.
Minnesota
Minnesota ranks among the top five states for per-capita tax contribution surplus, at $7,605 per person in 2023. The federal government collects less revenue because fewer residents rely on federal safety-net programs. The state also lacks major military bases or large-scale defense contractors.
Fiscal watchdogs argue that this pattern disproportionately burdens working-class Minnesotans who fund national programs without receiving proportionate support. Budget planners in St. Paul continue pushing for fairer grant distribution formulas.
Colorado
Colorado’s tech, tourism, and energy sectors generate substantial federal tax contributions. Despite this, the state receives below-average returns, approximately $0.92 per $1.00 paid. Limited federal land purchases and smaller military installations contribute to this imbalance.
Tax policy researchers note that urban areas like Denver and Boulder skew the data with high tax revenues and minimal entitlement use. Leaders remain concerned about the rising costs of infrastructure projects, with minimal federal offsets.
Utah
Utah stands out among red states as a consistent net contributor to the federal budget. According to 2023 data from USAFacts and the IRS, Utah contributed roughly $7 billion more than it received in return. Its strong job market, fiscal conservatism, and balanced budgets reduce the need for federal aid.
Utah’s self-sufficiency has drawn national attention, particularly as federal funds shift to higher-need Southern states. State officials argue for fairer reimbursement for natural disaster readiness and national park maintenance.
Delaware
Delaware recorded the highest per-capita tax surplus in 2023, at $10,505 per resident, driven by its incorporation-friendly laws and strong banking sector. It receives significantly less federal spending due to its limited rural poverty and minimal defense funding.
Despite this, Delaware plays a significant legal and financial role in corporate America, which boosts its tax profile. State economists describe this as a “quiet subsidy machine” for the rest of the country. Calls for higher infrastructure investment in return remain ongoing.
Nevada
Nevada bucks national trends as a red-leaning, net-contributor state. Its tourism and gaming sectors generate substantial tax revenue for Washington, with fewer returns through entitlements.
In 2023, Nevada joined the ranks of fiscally productive states, earning praise from national economists. Yet, minimal federal aid for drought and water infrastructure has drawn criticism. State leaders demand stronger support, given their revenue-to-return gap.
Texas
Texas, a mixed case, often straddles the line but remained a net contributor in 2023. Its large economy and booming population ensure high tax intake. However, disaster aid and border-related spending offset some of that.
The data show Texas contributed slightly more than it received last year, earning it a place on this list by a margin. High-income areas, such as Austin and Dallas, drive the surplus. Still, analysts warn that growing reliance on entitlements in rural counties could soon shift this balance.
