With the tax deadline drawing near, the personal finance website WalletHub followed up on its report on the States with the Highest & Lowest Tax Rates with an in-depth analysis of 2016’s Most & Least Federally Dependent States to determine how dependent states with the lowest tax rates are compared with those paying the highest.
Arizona is just outside the of the top 10 most federally dependent states ranked at number 13. Interestingly, Arizona is the only state having the same ranking 14th in both the state and individual dependency ranking.
In order to identify which states most and least depend on federal support, WalletHub’s analysts compared the 50 states across three key metrics: 1) return on taxes paid to the federal government; 2) federal funding as a percentage of state revenue; and 3) share of federal jobs.
| Most Federally Dependent States | Least Federally Dependent States | ||||
| 1 | Mississippi | 41 | New York | ||
| 2 | New Mexico | 42 | New Hampshire | ||
| 3 | Alabama | 43 | Minnesota | ||
| 4 | Louisiana | 44 | Nevada | ||
| 5 | Tennessee | 45 | Illinois | ||
| 6 | Montana | 46 | California | ||
| 7 | South Dakota | 47 | Kansas | ||
| 8 | Kentucky | 48 | New Jersey | ||
| 9 | West Virginia | 49 | Connecticut | ||
| 10 | Missouri | 50 | Delaware | ||
Comparing the States:
- There is a 63 percent correlation between a state’s federal dependency and its per-capita GDP. That means the least wealthy states tend to receive the most federal support.
- Kansas is the 4th least federally dependent state, making sense of the fact that it has the 11th highest tax rates in the nation. On the flip side, Tennessee is the 5th most federally dependent state and, as can also be expected from that ranking, pays the 6th lowest tax rates.
For the full report and to see where your state ranks, please visit:
https://wallethub.com/edu/states-most-least-dependent-on-the-federal-government/2700/