The actual per-taxpayer cost depends on which programs you count and how you divide the total
There is no single answer because "welfare" includes dozens of programs — food assistance, housing vouchers, cash aid, Medicaid, child care subsidies — and the total cost divided by the number of taxpayers gives a different figure than the cost divided by the number of workers, or by households, or by income earners. The federal government spent roughly $1 trillion on means-tested programs in 2023, but that includes Medicaid, which serves elderly and disabled people who paid into the system. If you divide $1 trillion by roughly 150 million individual tax filers, you get about $6,700 per filer per year. If you divide it by roughly 130 million workers who pay payroll tax, the figure rises to about $7,700. But these numbers flatten out real differences: someone earning $200,000 pays far more in total tax than someone earning $40,000, so the cost per dollar of tax paid is not the same for everyone.
The breakdown also matters. Medicaid alone accounted for roughly $600 billion in federal spending in 2023. SNAP (food assistance) was roughly $140 billion. Housing assistance was roughly $80 billion. Cash aid programs like TANF (Temporary Assistance for Needy Families) were roughly $30 billion. The remaining hundreds of billions went to tax credits like the Earned Income Tax Credit, child tax credits, and other targeted programs. A taxpayer's actual cost depends entirely on which programs the question includes.
Key Takeaways
- Federal means-tested welfare spending totaled roughly $1 trillion in 2023, but this includes Medicaid, which serves people who paid payroll taxes for decades.
- Dividing total spending by the number of tax filers gives roughly $6,700 per person per year; dividing by workers gives roughly $7,700, but these are averages that hide wide variation in who pays what.
- Medicaid is the largest single program at roughly $600 billion; SNAP is roughly $140 billion; housing assistance is roughly $80 billion; and cash aid is roughly $30 billion.
- The cost per taxpayer is not the same as the cost per dollar of tax paid — high earners pay more in absolute dollars but a smaller share of their income.
How the federal government counts welfare spending
The U.S. Office of Management and Budget (OMB) tracks spending on "means-tested programs" — programs that limit who can receive them based on income. In fiscal year 2023, federal means-tested spending was approximately $1.0 trillion. This includes Medicaid, SNAP, housing assistance, TANF, the Earned Income Tax Credit (EITC), the Child Tax Credit (CTC), child care and development block grants, and dozens of smaller programs.
State and local governments add their own spending on top of federal dollars. Many states fund a portion of Medicaid; some run their own cash assistance programs; some add money to housing programs. The total cost to all levels of government is higher than the federal figure alone, but there is no single authoritative number because states report differently and some programs are jointly funded.
The OMB publishes these figures annually in budget documents, but the definitions change slightly year to year as programs are added, removed, or reclassified. The Congressional Research Service (CRS) also publishes detailed breakdowns, and their numbers sometimes differ from OMB's depending on what they include in "means-tested."
Why dividing total spending by taxpayers is misleading
The most common way to calculate per-taxpayer cost is to take total federal spending and divide by the number of people who file federal income tax returns. In 2023, roughly 150 million individual returns were filed. Dividing $1 trillion by 150 million gives approximately $6,700 per filer. But this number hides several problems.
First, not all taxpayers pay the same amount of tax. The top 10 percent of earners pay roughly 70 percent of all federal income tax. The bottom 50 percent pay roughly 3 percent. So the cost per dollar of tax paid is vastly different depending on income. A person earning $30,000 and paying $2,000 in federal tax bears a different share of the $1 trillion than a person earning $300,000 and paying $80,000 in tax, even though both are counted as one "taxpayer" in the division.
Second, many people who receive welfare also pay taxes. A single parent working full-time at $28,000 per year may receive SNAP, housing assistance, and the EITC — and also pay federal income tax and payroll tax. They are both a taxpayer and a welfare recipient. Dividing total spending by total taxpayers treats them as if they are in one category or the other, when they are in both.
Third, some welfare spending goes to people who are not working and do not file taxes — children, elderly people, disabled people. Dividing by the number of tax filers inflates the per-filer cost because it does not account for the size of the population receiving benefits.
Different ways to calculate the cost change the answer significantly
The per-taxpayer cost varies depending on which denominator you choose:
| Calculation method | Denominator | Approximate result (2023) |
|---|---|---|
| Per individual tax filer | 150 million filers | ~$6,700 |
| Per worker paying payroll tax | 130 million workers | ~$7,700 |
| Per household | 130 million households | ~$7,700 |
| Per person in the U.S. population | 335 million people | ~$3,000 |
Each calculation is mathematically correct but answers a different question. "Per worker" is often used because workers are the ones paying payroll tax. "Per household" is used when comparing to household income. "Per person" is used when discussing the cost as a share of total national output. None of them is wrong; they just measure different things.
Medicaid makes up more than half the total, and it serves people who paid taxes
Medicaid is the single largest means-tested program at roughly $600 billion in federal spending in 2023. But Medicaid serves three very different groups: low-income children and parents, elderly people, and disabled people. The elderly and disabled populations often spent decades paying payroll tax before becoming may be able to access for Medicaid. They are not "welfare recipients" in the sense of people who never paid into the system; they are people whose medical costs exceed what they can pay out of pocket.
If you remove Medicaid from the calculation, the remaining means-tested spending (SNAP, housing, cash aid, tax credits, and other programs) was roughly $400 billion in 2023. Divided by 150 million tax filers, that is roughly $2,700 per filer per year. This is a more accurate figure for "traditional welfare" programs that provide cash or in-kind assistance to people based on current income, rather than programs that serve people across the income spectrum.
The distinction matters because the question "how much does welfare cost?" often implies a question about dependency or work incentives. Medicaid for an 85-year-old or a person with severe disabilities is a different policy question than SNAP for a working parent or TANF for someone between jobs.
State and local spending adds to the federal total
States and localities contribute their own money to welfare programs, which increases the total cost beyond the federal figure. Medicaid is jointly funded by federal and state dollars; the federal government pays between 50 and 77 percent depending on the state's income level, and the state pays the rest. In 2023, state Medicaid spending was roughly $200 billion.
Some states also run their own cash assistance programs that supplement TANF, their own housing programs, or their own food assistance programs. New York, California, and Massachusetts, for example, have state-funded programs that serve people who do not meet federal income limits. The total state and local spending on means-tested programs is roughly $300 billion per year, though this varies significantly by state.
If you include state and local spending, the total cost of means-tested programs rises to roughly $1.3 trillion per year. Divided by 150 million tax filers, that is roughly $8,700 per filer. But again, this includes Medicaid, which serves people who paid taxes, and it includes state income tax, which is not the same as federal income tax.
The cost per taxpayer has grown, but so has the number of people receiving benefits
Federal means-tested spending has roughly doubled in real dollars (adjusted for inflation) over the past 30 years. In 1990, federal means-tested spending was roughly $500 billion in today's dollars. By 2023, it was roughly $1 trillion. This increase reflects both population growth and expansion of programs like Medicaid and the EITC.
The number of people receiving means-tested benefits has also grown, though not at the same rate as spending. SNAP enrollment, for example, was roughly 20 million people in 1990 and roughly 42 million in 2023. Medicaid enrollment was roughly 30 million in 1990 and roughly 72 million in 2023. The per-person cost of benefits has also risen, partly because of medical inflation in Medicaid and partly because benefit levels have been adjusted for inflation.
Whether this increase represents growth in "welfare dependency" or growth in the number of people who need help is a policy question, not a factual one. The data shows that spending and enrollment have both grown; the interpretation depends on assumptions about work, disability, and the role of government.
Frequently Asked Questions
Does the per-taxpayer cost include my state and local taxes?
No, the figures here refer only to federal spending and federal tax filers. Your state and local taxes fund additional welfare programs. If you want to know the total cost including state and local programs, you would need to add state spending and divide by state tax filers, which varies widely by state.
Why is the EITC counted as welfare if it goes to working people?
The EITC is counted as a means-tested program because it is limited to people below a certain income threshold. It functions as a wage subsidy for low-wage workers rather than a cash transfer, but it is still a government benefit that requires income verification. Whether it should be called "welfare" is partly a matter of definition.
What percentage of my federal income tax goes to means-tested programs?
Roughly 20 to 25 percent of federal spending goes to means-tested programs. Federal income tax funds all federal spending, so roughly 20 to 25 cents of every dollar of federal income tax goes to means-tested programs. The rest goes to Social Security, Medicare, defense, interest on debt, and other programs.
Does welfare spending include Social Security and Medicare?
No. Social Security and Medicare are not means-tested; they are available to people regardless of income if they meet age or work history requirements. This article counts only means-tested programs. Social Security and Medicare are much larger programs — together they account for roughly $2.5 trillion in federal spending.
How do other countries' welfare spending compare to the United States?
Most wealthy countries spend a higher percentage of their total output on social programs than the United States does, though the programs are structured differently. Some countries provide universal health care (which reduces means-tested Medicaid spending) or universal child care. Comparing across countries requires adjusting for different program structures and definitions, so direct per-taxpayer comparisons are not straightforward.