Texans Pay $453 Billion a Year for a Government That Costs $295 Billion

Daniel Miller gave the entire hour of this week’s Late Night Coffee Talk to a walkthrough of the Texas Nationalist Movement’s rewritten “Can Texas Make It?” report, three days ahead of its August 3 release. The 2015 original ran twelve pages and answered one question, whether Texas paid more into the federal system than it got back. The new version runs 46 pages and asks a harder one. Taxed exactly as they are taxed today, with no state income tax, do Texans already raise enough to pay for every function of government in Texas if Texas governed itself? Miller said the answer is yes, and that it is not a theory.

He walked the arithmetic on screen. Across the six most recent fiscal years with complete data, 2019 through 2024, Texans paid an average of $351.9 billion in federal taxes and $101.7 billion in state taxes and fees, $453.5 billion a year for two governments. Take out the $176.9 billion in portable individual benefits that follow a person to Florida or to Portugal, Social Security, Medicare, veterans cash benefits and federal pensions, then take out the $50.7 billion annual average of one-time pandemic relief, and the full cost of government in Texas lands at $295.3 billion. Run the same balance-of-payments method the Rockefeller Institute and WalletHub use, Miller said, and Texas still overpays Washington by $68 billion a year, the third largest net contribution of any state.

The finding he called the most shocking of the whole project was about age. Texas has a median age of 35.9 against 39.2 for the union. That young workforce ships a net $12 billion to $13 billion a year out of Texas to fund retirements in older states, roughly $75 billion across the six-year window, while carrying more than $100,000 apiece in federal debt run up in its name without its votes. Miller tied it to housing, arguing that money leaving a 26-year-old’s paycheck for a Social Security fund projected to go insolvent around 2031 is money that could have gone toward a down payment. Staying, he said, is the expensive option.

In this episode

• Why the 2015 report’s balance-of-payments framing answered the wrong question, and what fiscal capacity measures instead
• How Rockefeller Institute and WalletHub arrive at Texas being a taker state by counting retirees’ Social Security checks as federal generosity
• Why federal money borrowed and spent in Texas is deferred tax, and whose name it is borrowed in
• The 2012 disappearance of the Census Bureau’s Consolidated Federal Funds Report, and why Medicare spending by state of residence has not been published since 2020
• What Texans now pay in pure interest on Washington’s past borrowing, up from about $31 billion in 2019 to roughly $80 billion in 2025
• The “An Unsustainable Fiscal Path” section in the Treasury’s own audited financial report, and the GAO’s call for urgent and sustained action
• The 2022 inflation tax that drained about $150 billion out of Texas bank deposits, half again more than every Texas state tax collected in a year
• Why a Texas-run Social Security program would open in the black, at 8.7 percent of the taxes paid in against 6.7 percent of the benefits drawn out
• How the report was stress-tested: six years averaged so no year could be cherry-picked, pandemic relief left in the count, and a draft handed to hostile reviewers months ago to break