Arizonans paid, on average, $11,264 in federal taxes in 2016, a new report says, 28th-most among states. Connecticut residents paid the most, at $22,785, while West Virginia residents’ average $8,607 tax payment was lowest. (Photo by 401kCalculator.org/Creative Commons)
WASHINGTON – After accounts are settled Tuesday with Uncle Sam, the typical Arizonan will have sent $11,264 to the federal government, about 20 percent below the national average of $14,051, according to an economic policy think tank.
The National Priorities Project’s breakdown of state spending on federal taxes also said that more than half the budget will go to health and defense spending. By comparison, spending on education and veterans benefits will amount to 6 and 3 percent, respectively.
That came as a surprise to Noni Nez, an archeologist with the National Forest Service in Arizona as she was getting off a flight at Reagan National Airport on Monday.
“I think education and health should be our number one priority,” Nez said. “I’m surprised that education is so low, but I’m glad we’re spending a lot of money on healthcare.”
In fact, the National Priorities Project estimates that Arizona residents sent an average of $2,679.09 for Medicaid and Medicare in their 2016 taxes. The bill for spending on military personnel was $559.90 per person in the state, while $72.79 went to nuclear weapons.
The report said that in every tax dollar, 29.1 cents went to health spending, 23.4 cents went to defense and 13.2 cents was consumed by interest on the federal debt. Another 7.5 cents went to unemployment and labor expenses, 4.5 cents were for food and farms, 4.2 cents went to government, 3.2 cents went to transportation and 2.1 was for housing.
Veterans got 6 cents, schools got 2.8 cents and less than two pennies each went to energy and the environment, international affairs, and science.
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Arizona was 28th among states for its share of taxes collected. Connecticut sent the most, at $22,785, and West Virginia the least, at $8,607.
The difference in the amount sent to Washington varies, one expert said, based on how many of its resident are in the workforce and their incomes.
“The payroll tax is a tax on wages, so if you have one state that has an higher share of the population that is working age than another state, they’re going to send more payroll taxes to the federal government,” said Josh Bivens, research director at the Economic Policy Institute in Washington.
That affects states like Arizona and Florida with high rates of retirees, he said. The other factor is the income level of state residents.
“California, New York, Massachusetts, pretty rich states with lots of high-income households will send a lot,” Bivens said. “States like Mississippi, Alabama, without that many high-income households will send less through the federal income tax.”
That’s because income taxes are progressive, collecting a higher percentage from higher earners, he said. But states have some control in what they get back under some federal programs, Bivens said.
“A classic example is the Medicaid program,” Bivens said. “So basically, the more generous a state is with its own state-level Medicaid program the more federal dollars they get.”
Nez said she would like to see Arizona change up its priorities a bit. While she’s happy with the amount that goes to health, she does not think the state spends enough on education, for example.
But like many on Tax Day, she’s not eager to have more money taken out of her pocket.
“I don’t want more money to be taken out of my paycheck, but then again, would I notice? I don’t know,” Nez said. “I’m putting away for my retirement. Money comes out for my health insurance, and it just gets taken out automatically.”