
I’ve been thinking about the polarization of America along the famous Red and Blue state lines and thought I’d do a little investigating. Specifically, politicians from Red states have consistently promoted a line of lowering taxes and keeping government out of people’s lives. This message is currently on tour with a new Tea Party campaign which will run a route from California through the Plains states and into the Deep South – basically a red state tour.
In trying to diagnose why Plains-state and Southerners are so concerned about federal taxation and government programs, it dawned on me that perhaps the difference between Red and Blue staters is in our everyday experience with governmental activity. Specifically, Blue states are more industrialized and have larger, more dense populations than Red states. As such, Blue staters see road projects, bridges, governmental agencies, public security, help for the poor, programs for the elderly, etc every day. Thus, they see the “benefit” of government programs every day. Conversely, if you live in a rural county, down a country road or across a big corn field, perhaps you don’t “see” the benefit of government spending and thus, don’t see the value of your tax dollar.
So I looked for research on which states pay the most taxes and which states receive the most federal dollars – assuming that Red states are net tax payers and Blue states are net federal funds receivers. I was dead wrong.
In fact, Red states are overwhelmingly beneficiaries of federal funds. Federal expenditures (from a Tax Foundation report - see below) are the sum of federal purchases, direct payments (social security, medicare, etc), and salaries to federal employees. In addition to state-by-state per-capita tax burden and expenditures, the report calculates the ratio of the same. For example, if your state has a ratio of 1.10 this means that for every tax dollar paid by residents, the state receives back $1.10 in federal spending.
The state with the greatest per capita federal spending and the second highest ratio of spending to taxes paid is: Alaska! With over $13,000 in annual spending per resident and a ratio of $1.87, Alaska takes the cake as the largest beneficiary of the federal government! The highest ratio state is New Mexico at $2.00 received for every dollar in taxes paid. (Perhaps this is because we keep all the UFO’s that have landed in the US in New Mexico and they are expensive to maintain??) In fact, the top 10 states that are making out in federal spending are, in order of ratio: NM, AL, WV, MS, ND, AL, VA, HI, MT and SD. By my count, that’s 8 traditionally Red states and two Blue (NM and HI)!
And who are the “losers” – ie, the “donor states”? The top ten donors are NJ, CT, NH, MI, IL, NV, MA, CA, NY and CO – or 8 Blue states and two Red (NV and CO)! In fact, the ratios for the biggest donor states are very low with New Jersey (the “biggest loser!”) at 55 cents, CT at 66 cents and NH at 67 cents. For my reading audience in NY and MA, your ratios are 79 and 77 cents respectively. And my pals in PA and VA, your ratios are $1.06 and $1.66. I think Virginia’s ratio is likely skewed because so many northern Virginians work for the government in DC and thus their salaries, etc would be in the ratio.
I did my own calculation of the average ratios for Red and Blue states but added the wrinkle of defining several states as “Purple” – meaning that they have mixed populations that sometimes swing Democratic and sometimes Republican. The purples are: LA, WV, VA, AR, MO, AZ, OH, FL, CO, NH and NV. My calculated average ratio for Red states is $1.34, for Purple $1.20 and for Blue states $1.00. The average for the entire US was $1.17 which implies that domestic expenditures exceed federal taxes received by 17% - hence a big national deficit!
There’s much more detail in the report and data to parse, but in short, the people who pay the least taxes and get the most back from the government want less taxes and less government. And, the people who pay the most taxes and get the least back from the government are willing to expand the system. So, unlike many things in life, who get the most “Green” doesn’t explain who is Red and who is Blue!
My source of info is a report issued by the Tax Foundation in 2006 (latest available). The report “Federal Tax Burdens and Expenditures by State” can be found here: http://www.taxfoundation.org/files/sr139.pdf
In trying to diagnose why Plains-state and Southerners are so concerned about federal taxation and government programs, it dawned on me that perhaps the difference between Red and Blue staters is in our everyday experience with governmental activity. Specifically, Blue states are more industrialized and have larger, more dense populations than Red states. As such, Blue staters see road projects, bridges, governmental agencies, public security, help for the poor, programs for the elderly, etc every day. Thus, they see the “benefit” of government programs every day. Conversely, if you live in a rural county, down a country road or across a big corn field, perhaps you don’t “see” the benefit of government spending and thus, don’t see the value of your tax dollar.
So I looked for research on which states pay the most taxes and which states receive the most federal dollars – assuming that Red states are net tax payers and Blue states are net federal funds receivers. I was dead wrong.
In fact, Red states are overwhelmingly beneficiaries of federal funds. Federal expenditures (from a Tax Foundation report - see below) are the sum of federal purchases, direct payments (social security, medicare, etc), and salaries to federal employees. In addition to state-by-state per-capita tax burden and expenditures, the report calculates the ratio of the same. For example, if your state has a ratio of 1.10 this means that for every tax dollar paid by residents, the state receives back $1.10 in federal spending.
The state with the greatest per capita federal spending and the second highest ratio of spending to taxes paid is: Alaska! With over $13,000 in annual spending per resident and a ratio of $1.87, Alaska takes the cake as the largest beneficiary of the federal government! The highest ratio state is New Mexico at $2.00 received for every dollar in taxes paid. (Perhaps this is because we keep all the UFO’s that have landed in the US in New Mexico and they are expensive to maintain??) In fact, the top 10 states that are making out in federal spending are, in order of ratio: NM, AL, WV, MS, ND, AL, VA, HI, MT and SD. By my count, that’s 8 traditionally Red states and two Blue (NM and HI)!
And who are the “losers” – ie, the “donor states”? The top ten donors are NJ, CT, NH, MI, IL, NV, MA, CA, NY and CO – or 8 Blue states and two Red (NV and CO)! In fact, the ratios for the biggest donor states are very low with New Jersey (the “biggest loser!”) at 55 cents, CT at 66 cents and NH at 67 cents. For my reading audience in NY and MA, your ratios are 79 and 77 cents respectively. And my pals in PA and VA, your ratios are $1.06 and $1.66. I think Virginia’s ratio is likely skewed because so many northern Virginians work for the government in DC and thus their salaries, etc would be in the ratio.
I did my own calculation of the average ratios for Red and Blue states but added the wrinkle of defining several states as “Purple” – meaning that they have mixed populations that sometimes swing Democratic and sometimes Republican. The purples are: LA, WV, VA, AR, MO, AZ, OH, FL, CO, NH and NV. My calculated average ratio for Red states is $1.34, for Purple $1.20 and for Blue states $1.00. The average for the entire US was $1.17 which implies that domestic expenditures exceed federal taxes received by 17% - hence a big national deficit!
There’s much more detail in the report and data to parse, but in short, the people who pay the least taxes and get the most back from the government want less taxes and less government. And, the people who pay the most taxes and get the least back from the government are willing to expand the system. So, unlike many things in life, who get the most “Green” doesn’t explain who is Red and who is Blue!
My source of info is a report issued by the Tax Foundation in 2006 (latest available). The report “Federal Tax Burdens and Expenditures by State” can be found here: http://www.taxfoundation.org/files/sr139.pdf