Federal Funding / Taxes: Which States Win
and Which States Lose?
Compiled by
David Pakman
Part of the stereotypical Republican and Democratic mantras
address taxes. Put simply, Republicans want lower taxes and less
handouts/expenditures by the government to pay for programs,
fund initiatives, etc. On the other hand, Democrats favor a
higher tax rate, with the idea that the government should then
use those funds to pay for various programs and initiatives.
Based on this general idea about how taxes should be
administered and used, the Republican party typically pushes for
tax and welfare reductions, as well as "fiscal responsibility,"
while the Democrats tend to push for higher taxes in order to
increase funding for a variety of federal programs, including
welfare, although this is certainly not the case with every
issue. Here, we will look at who actually benefits the most
under the current tax system.
By comparing each state's share of money send to Washington DC
to the flow of federal funds returned to the state, in order to
determine who is receiving the most per dollar spent. The
results are, to many, surprising. The states which benefit the
most from federal expenditures are almost entirely the
so-called "red states," which voted Republican in this last
election. This means they receive the most money back from the
federal government for each dollar they pay in. On the other
hand, the states which receive the least back for each
dollar they send to DC are overwhelmingly "blue state," or
states which tend to vote for the Democratic candidate.
To give an example, New Mexico is the state which receives the
most money back from the government. This means that for every
dollar that New Mexico sends to Washington DC, they get back
$2.37. On the other hand, New Jersey only receives 62 cents for
every dollar they pay out.
Here is a map of the states receiving the highest share of money
from the federal government for every dollar spent:
What can we determine from this? Well the one thing that stands
out to me is that the states which want less government spending
and lower taxes are the ones that depend on and benefit most
from the government redistributing other states' taxes to them.
On the other hand, the states that tend to vote more often for
increasing taxes and government-funded programs are the states
which provide the most money to other states, and are
already receiving the least benefit from federal funding.
Whether or not knowing this data changes anything is hard to
say, and maybe irrelevant. What's interesting is that there is
no doubt that the overwhelming majority of the residents of all
states, whether they have a surplus or deficit in terms of
federal funding, most likely have no idea. That is, due to their
mantra/motto, it would be expected that residents of the
low-tax-pushing conservative states would think that they aren't
so dependent on the federal funding which they don't want, while
resident of the higher-tax-pushing liberal states probably
assume that they are receiving more from the government
than they actually do.
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