Just the opposite. The graph represents the $ paid to the fed vs. what they receive in federal funding. NY and CA receive less than a dollar of federal funding for every dollar they pay in. Contrast those states that the OP and others claim are "stealing" because of the deduction with those states who have no state income tax. You will see that it is actually those states with no income tax that receive much more than they pay. Seven U.S. states currently don't have an income tax: Alaska, Florida,Nevada, South Dakota, Texas,Washington and Wyoming.