New York has the highest tax burden across the board than any other state in the country. The state and local tax burden takes just shy of 16% on average and that does not include federal income tax.
In a small bright spot, a recent analysis by New York State Comptroller Tom DiNapoli shows NY received $1.06 for every $1 in taxes sent to DC in FFY 2023 – the most recent year for the full analysis.
DiNapoli continues a tradition started in 1977 by U.S. Senator Daniel Patrick Moynihan who pioneered the concept of this balance of payments report. This report is the ninth issued by DiNapoli’s office detailing the differences among the 50 states with respect to what they pay in federal taxes and how much they receive in federal spending.
Federal pandemic relief funds resulted in New York having a positive balance of payments with Washington, with the state ranking 42nd on a per capita basis.
This is the fourth year in a row that New York has had a positive balance of payments, after a long history of sending more tax dollars to Washington than it receives back.
“With the end of pandemic aid, this may be the last year we find New Yorkers with a positive return from Washington,” DiNapoli said. “Actions taken by the Trump Administration and Congress may cut health care, food assistance, infrastructure and other critical programs to the detriment of all New Yorkers. Major cuts in federal funding simply cannot be replaced by state taxpayers, will reduce the services the state provides and will exacerbate the long-standing history of New Yorkers sending more of their hard-earned tax dollars to the federal government than they get back.”
New Jersey, Massachusetts and Washington were the only states to have a negative balance. Prior to the pandemic, New York consistently ranked among the states with the largest negative balance of payments.
New York generated approximately $320.1 billion in tax collections, 7.5% of all U.S. tax collections in FFY 2023, while the state represented 5.8% of the nation’s population. New York’s per capita contribution to the federal treasury was 27.8% more than the national level.
Individual income taxes represent the largest portion of taxes paid with NYers paying 35.9% more than the national average. The second largest component of federal revenues is payments for social insurance taxes and contributions where NY sends 14.2% above the national level ranking it 7th.
NY is known as a very unfriendly business state with regard to taxes, fess, and regulations and it shows in the numbers. The state ranked first on per capita corporate income taxes being 47% higher than the national level.
NY is a big spender when compared to other states in the categories of Medicaid (2nd), Supplemental Nutrition Assistance Program or SNAP (4th), rental assistance and public housing (1st), and Supplemental Security Income (6th).