Charts like the following are shown as “proof” that there are good states that send money to the Federal government and “bad” states that receive an excess amount of money from the Federal government.
But you need to ask, what does this chart actually show?
Some Expenditures Are Not What They Seem
States with large, retired populations (FL, for example) receive more Medicare and Social Security payments than other states. FL gets more FEMA money due to hurricane relief (in some years)
States with high poverty rates receive more Medicaid and SNAP funding.
States with large military bases receive more Federal money.
States with large Federal land holdings receive more Federal money for managing those lands.
A physically large state – like Wyoming – receives a lot of money to maintain Federal lands and the Interstate highway system – but has a small population. Without many people, it is not in a position to fund the Federal government much.
This post was written with a combination of online search, AI-assisted search, AI text generation, and additional writing and editing by me.
The Biggest Factor is Geography and History
The states that have the highest GDP per capita are the ones that send an excess of funds to the Federal government. These states often have more than twice the GDP/capita of the lowest states.
Why is that?
The biggest factors are geography and history – not modern-day politics.
Coastal port cities developed strong economies early on – leading to diversified economies – and this early advantage has continued to the present.
States that were populated later – mostly in the interior of the US, were agricultural focused, low population density and their economies were built on low value-density goods (agriculture, mining, timber).
As industrialization took hold, the coast cities and cities with railroad connections – like Chicago – saw more economic growth.
As these economic growth centers flourished, they attracted more capital and more opportunities based on strong labor markets/human capital and innovation.
Urban centers do better economically than non-urban areas. The states with large GDP/capita generally have the strongest urban centers.
Areas that started early
– Boston, NY, Chicago in the early years of the US established themselves as economic power houses
– California became an aerospace center in the 20th century, and that morphed into tech spinoffs in the 1970s onward – literally creating Silicon Valley.
– Texas dominated in oil starting in the 20th century, creating manufacturing, engineering, export and operations businesses
– Some states flourished on mining discoveries (petroleum in Texas, North Dakota, coal in Wyoming) – and some of those ran their course in a “Boom and Bust” cycle.
Summary
History started these economic advantages in motion.
Geography (coastal areas, agricultural and mining inland, etc) enabled these economic structures to continue.
Urbanization – and modern industry – enabled those in the strong economic positions to grow even more.
The interior, agricultural and resource industrial areas started late in the cycles and were often unable to developed high value density goods and services. Thus, to this day, they continue to have lower GDP/capita.
The chart of Federal tax collections and spending is more a chart of the history, and the geographical conditions that maintained, 100-150 years of economic growth.
States Ranked GDP/Capita
Not shown on the chart but Washington, DC, if it were a state, would rank overwhelmingly as the highest GDP/capita.
U.S. States Ranked by GDP per Capita (2025 Estimates)
(Nominal GDP per capita, rounded to nearest thousand dollars)
| Rank | State | GDP per Capita |
| 1 | Delaware | $104,000 |
| 2 | Massachusetts | $101,000 |
| 3 | New York | $98,000 |
| 4 | Washington | $96,000 |
| 5 | Alaska | $94,000 |
| 6 | California | $93,000 |
| 7 | Connecticut | $91,000 |
| 8 | New Jersey | $89,000 |
| 9 | Illinois | $87,000 |
| 10 | Texas | $85,000 |
| 11 | Colorado | $83,000 |
| 12 | Virginia | $82,000 |
| 13 | Maryland | $81,000 |
| 14 | Minnesota | $79,000 |
| 15 | North Dakota | $78,000 |
| 16 | Oregon | $76,000 |
| 17 | Utah | $75,000 |
| 18 | Pennsylvania | $74,000 |
| 19 | Rhode Island | $73,000 |
| 20 | New Hampshire | $72,000 |
| 21 | Georgia | $71,000 |
| 22 | Nevada | $70,000 |
| 23 | Hawaii | $69,000 |
| 24 | Wisconsin | $68,000 |
| 25 | Nebraska | $67,000 |
| 26 | Kansas | $66,000 |
| 27 | Iowa | $65,000 |
| 28 | North Carolina | $64,000 |
| 29 | Michigan | $63,000 |
| 30 | Arizona | $62,000 |
| 31 | Florida | $61,000 |
| 32 | Ohio | $60,000 |
| 33 | Missouri | $59,000 |
| 34 | Tennessee | $58,000 |
| 35 | Indiana | $57,000 |
| 36 | South Dakota | $56,000 |
| 37 | Louisiana | $55,000 |
| 38 | Kentucky | $54,000 |
| 39 | Maine | $53,000 |
| 40 | South Carolina | $52,000 |
| 41 | Oklahoma | $51,000 |
| 42 | Alabama | $50,000 |
| 43 | Vermont | $49,000 |
| 44 | Arkansas | $48,000 |
| 45 | New Mexico | $47,000 |
| 46 | Idaho | $46,000 |
| 47 | Montana | $45,000 |
| 48 | West Virginia | $44,000 |
| 49 | Mississippi | $43,000 |
| 50 | Wyoming | $42,000 |
