Red states are, on average, more reliant on federal funding than their blue counterparts.
 
That’s according to WalletHub, an online personal finance resource, which compared the  50 states as well as the District of Columbia on three primary metrics: return on taxes paid to the federal government, federal funding as a percentage of state revenue and number of federal employees per capita.
 
By comparing states using these criteria, WalletHub found the least dependent were:

  • Delaware
  • Illinois
  • Minnesota
  • New Jersey
  • Connecticut
  • Kansas
  • California
  • Nevada
  • Massachusetts
  • Colorado

 
The most dependent states were:

  • Mississippi
  • New Mexico
  • Alabama
  • Louisiana
  • Maine
  • Montana
  • Tennessee
  • West Virginia
  • South Dakota
  • Arizona

The study found a 34.4 percent correlation between a state’s federal dependency and its tax rates, meaning the more dependent a state is on the federal government, the less likely it is to charge higher taxes.
 
WalletHub suggests particular states can afford to keep taxes artificially low because they are receiving a disproportionate amount of federal aid. According to the study, “That would change the narrative significantly, revealing federal dependence where bold, efficient stewardship was once thought to preside.”
 
To find out more, or see where your state ranks in terms of federal dependence, read the full report here.
 
So how does the tax burden break down, state-by-state? In the 2014 Report on the States with the Highest & Lowest Taxes, WalletHub compared all 50 states and the District of Columbia to the national median in terms of 10 different types of taxation, ranging from state and local income tax to alcohol and telecomm taxes.
 
The group found the average American family is taxed around $7,000 annually, but the state in which a person resides is a major determinant on tax burden. Taxpayers in New York, the state with the highest rates, pay nearly four times more than those in Wyoming, the state with the lowest taxes. Generally, "red" states pay lower state taxes than "blue" states.

Wallethub says certain states can afford to keep taxes "articifically low" because they are receiving a disproportionate amount of federal aid (map above). According to the study, "That would change the narrative significantly, revealing federal dependence where bold, efficient stewardship was once thought to preside."

The ten states with the lowest taxes, according to the report, are:

State Average taxes paid Percent below national average
Wyoming $2,365 66 percent
Alaska $2,791 66 percent
Nevada $3,370 52 percent
Florida $3,648 48 percent
South Dakota $3,766 46 percent
Washington $3,823 45 percent
Texas $5,193 25 percent
Delaware $5,195 25 percent
North Dakota $5,588 20 percent
Colorado $5,674 19 percent

The ten states with the highest taxes, according to the report, are:

State Average taxes paid Percent above national average
New York $9,718 39 percent
California $9,509 36 percent
Nebraska $9,450 36 percent
Connecticut $9,099 31 percent
Illinois $9006 29 percent
Wisconsin $8,975 29 percent
Vermont $8,838 27 percent
New Jersey $8,830 27 percent
Iowa $8,788 26 percent
Maine $8,622 24 percent

To find out more, or see where your state ranks, read the full report here.

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