Which States Are the Biggest Moochers?

this mises.org analysis shows, many states within the Trump heartland are what many might call “moocher states” because the residents there — taken overall — receive more in federal spending than is paid in federal taxes: 

 

The second graph shows the specific amount of federal spending that goes to each state for each dollar spent:

 

see here.)

Fortunately, Antionio Cheves at American Thinker has added additional analysis to the mises.org article on this topic. Chaves writes: 

The most straightforward methodology for measuring “federal dependency” of states was presented by Ryan McMaken in the Mises Institute blog. Based on “federal spending per dollar paid,” business-friendly states like Texas and Utah among the net recipients of federal funds. McMaken attributes the federal budgetary shortfall in states like these to differences in urbanization and federal land ownership.

Regression analysis supports McMaken’s assertion that federal land ownership and urbanization play a large role in determining federal spending per dollar paid (Fig. 1 and 2). He rightly points out that urban economies generate more revenue than agriculture and federal monetary policies (such as low interest rates) favor urban investors at the expense of the “main street” households that predominate in rural states. Census data indicates that demographic differences (particularly differences in formal education) may also contribute to this disparity between urban and rural states.

 

Formal education is correlated to federal spending per dollar paid (Fig. 3 and 4). This is unsurprising because adults lacking a high school diploma or a college degree usually pay less taxes and consume more in federal nonretirement benefits like Medicare, food assistance, and unemployment. What is particularly noteworthy is how disproportionately college graduates are distributed between urban and rural states (Fig. 5). This no doubt contributes to the federal budgetary shortfall observed by McMaken in many of the less urbanized states. It is also worth noting that nine of the ten states with the lowest percent of college graduates all voted for Trump and that all of the ten states with the highest percent of graduates voted for Clinton in 2016.

See the full Chaves article here. 

Not surprisingly, states with lots of millionaires and billionaires produce more tax revenue, thus moving those states in the direction of being net taxpayer states. 

As with so many comparisons of this sort, there is no one way to do this analysis. But, some methods are certainly better than others. One of the most misleading and crankish methods is the one which looks at federal spending compared to state tax revenues. 

Wallethub and the Tax Foundation. The Wallethub analysis was used by The Atlantic to make the point that Texans are a bunch of moochers compared to the Californians. Although, as our own analysis shows, Texas ranks slightly better than California in this regard.