Interesting analysis from the WSJ. It turn out that there is a correlation between a state’s political leaning and how much federal moneys they take in vs. what they pay out. The result is counter intuitive - Blue states like NY, CA, OH get less federal investment back on their tax dollars than Red states like TX, SC, FL.
http://blogs.wsj.com/economics/2014/03/27/which-states-take-the-most-from-the-u-s-government/
*Please feel free to discuss intelligently… before degenerating this into our standard LR crap-slinging. *
Can we make the assumption that welfare disbursements from the Federal government are included here?
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It would only be counterintuitive to someone who doesn’t keep up with discussions in the Lavender Room.
No. I wasn’t directly or explicitly referring to welfare disbursements but a more general definition of hand-outs given to the state from the feds (hence the quotes around ‘Welfare States’). This could include anything from pork-belly contracts, federal projects, military bases, etc.
There are many problems with just looking at the hard numbers.
Case in Point. CA -vs- AZ, NV, and Utah.
CA takes in less than they pay in. AZ, NV, and Utah take in more. So by simply looking at the graph, you think AZ, NV, and Utah get a free ride at CA’s expense. But… Without the water stored in dam’s in AZ, NV, and UT, SoCal returns to the desert it is. In order to maintain, operate these Dams, AZ, NV, and UT need infrastructure. If CA wants the water, they need to pay the infrastructure.
Shall we compare the need for home heating oil in NY and MA -vs- the infrastructure in TX, LA, and AK?
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You may want to explore the methodology behind these numbers before championing the conclusions. If the author is only concerned with presenting state-by-state dependence (total dollars in, total dollars out), then why is state population included in the denominator (clearly benefitting highly-populated blue states)?
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Yes, good point, but isn’t the article about federal money? It seems like your examples–water, natural gas–have to do with the market and little to do with taxes.
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It’s no secret nor is it any surprise that blue states are in general more educated, more wealthy and red states are less so, with zero condescension intended. Of course blue states pay more in taxes and red states depend more on federal handouts. Is this obvious, or is it obvious?
Yes, Federal money is given to states like AZ, NV, and Utah to pay for the infrastructure so CA gets cheep water. The other option is every state gets dollar for dollar what they pay in, and AZ, NV, and Utah shut-off the water and tells CA to pay up.
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I don’t get the point. Is this money going to social welfare? How about we talk about that. How about we get a breakdown. This argument has been had before and it was determined this is two complicated a topic for such a simple statement as “who leeches more”.
If your point is that seniority brings home the bacon, congratulations, your simplification might actually support that to a small extent. Since the reps run the house, this would make the most sense they would return it to their distracts. After all, Alaska had several long term politicians who brought home the bacon for decades.
How about we talk about where most of this money goes? Most federal spending is in form of social security and medicare. I would think that goes to states with a lot more old people in it. That would certainly explain places like Arizona, Florida, etc. That appears to be included in this equation. Is that really welfare? After all, somebody living in New York may have paid these taxes decades ago and now collects on the return when the move to florida. Gov’t contracts? Would it not make sense for most gov’t contracts to go to successful companies. A company that chooses to be in a state that isn’t business friendly faces more hurdles to success than one that does chooses to go to a more friendly state. So we know that states like California, Illinois, Michigan, and New York have been losing business to other states that are more friendly. Makes total sense.
These were just the low hanging fruit, so while I don’t know what you were really trying to prove, you didn’t really do a good job of it.
True, I agree, seems like sketchy methodology, but what I said above still stands, esp. when comparing deep blue states (New England) and deep red states (deep South).
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Maybe the hard-working people in the poorer welfare states get tired of seeing their money go to lazy people so they become conservative and the state becomes red. That is how my really low income town is. We are a welfare haven. People flock here for free benefits. The majority of working folks are disgusted.
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Yes, Federal money is given to states like AZ, NV, and Utah to pay for the infrastructure so CA gets cheep water. The other option is every state gets dollar for dollar what they pay in, and AZ, NV, and Utah shut-off the water and tells CA to pay up.
As a Western Slope of Colorado resident I applaud you sir. I think most people out this way would LOVE to tell California to pay up or dry up.
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“but what I said above still stands, esp. when comparing deep blue states (New England) and deep red states (deep South).”
Message from TX and LA to New England. “I know you guys are upset that some of your tax money goes to us. To rectify that situation, we are no longer going to accept that money. I’m thinking come October or so, your going to be looking for home heating oil. So since we can’t use your taxes to maintain our roads & ports, the price is going to be higher.”
Either the Fed does it, or the market will do it.
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I think you’re getting mixed up with the Wallethub.com analysis referenced in the article. Wallethub created a index score based on three factors: 1. Return on Taxpayer Investment, 2. Funding as % of Revenue, and 3. Federal Employees Per Capita. Only this third metric uses a population base in its calculation.
My original posting only references the WSJ posting as it refers to only the first metric: Return on Taxpayer Investment. Quite simply - how much federal tax revenue is generated in that state vs. how much does the fed guberment send back into the state as spending. Its a simple ratio. The state’s population does not come into play.
Unsurprisingly VA and MD do really well (as in take in more fed dollars than they pay out) because of all the Fed Employees centered around the DC beltway.
But the surprises are states like SC - it gets back $7.87 of federal spending for every $1 of federal tax dollars collected. ND gets $5.31 in federal spending for every $1 collected. And its not because they are ‘underpopulated’ as WY only gets $0.91 back for every dollar collected.
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As a Western Slope of Colorado resident I applaud you sir. I think most people out this way would LOVE to tell California to pay up or dry up.
As a CA resident, I gladly offer to pay-up for water. But to be fair we grow a huge % of the nations fruits, vegetables, and nuts. To grow these with that expensive water, we’re just going to pass the cost on.
This Us -vs- Them is a great political tool, but in reality the reason we are so powerful is we are the UNITED states.
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It would be interesting to see the data correlated with population density. States like Montana with small populations and big areas appear to be sucking federal dollars disproportionately. Many expenses, such as highways, don’t scale proportionately with the size of the local population, and also provide benefits to high density areas outside of the region. Case in point is Interstate 90 – it doesn’t exist primarily for the benefit of the people of Butte and Bozeman, but to move goods between Chicago and Seattle.
As amusing as I find these kinds of infographics I think something people often point out is that spending on military bases counts as money to the state which doesn’t really constitute welfare (in theory). It would be interesting to look at each component and see how it’s doled out- it may or may not be very different. What’s the break down of welfare and medicaid? Other discretionary spending? Etc. Really this is about as informative on it’s own as the GDP map people were discussing a few weeks back.
Good point, I became a lot more conservative and libertarian when I moved to florida and saw my money being squandered. When I lived in Northern VA where half the people had college degrees maybe advanced degrees, and most of the people I encountered were professionals or the occasional non-English speaking immigrant, you don’t see your money getting squandered so much and might have less of a problem with that. It still happens, just not as disgustingly apparent. I also didn’t own property. I think that is a big deal. Blue states have fewer property owners. Income taxes are withheld and less painful, but when you stroke a check each month, you get reminded each month you are getting robbed. That is why they can increase income taxes slowly, with benefits varying in cost each year, any tax withholdings blends in. But you raise annual property taxes by 50 bucks and people lose elections.
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I think you’re getting mixed up with the Wallethub.com analysis referenced in the article. Wallethub created a index score based on three factors: 1. Return on Taxpayer Investment, 2. Funding as % of Revenue, and 3. Federal Employees Per Capita. Only this third metric uses a population base in its calculation.
My original posting only references the WSJ posting as it refers to only the first metric: Return on Taxpayer Investment. Quite simply - how much federal tax revenue is generated in that state vs. how much does the fed guberment send back into the state as spending. Its a simple ratio. The state’s population does not come into play.
Unsurprisingly VA and MD do really well (as in take in more fed dollars than they pay out) because of all the Fed Employees centered around the DC beltway.
But the surprises are states like SC - it gets back $7.87 of federal spending for every $1 of federal tax dollars collected. ND gets $5.31 in federal spending for every $1 collected. And its not because they are ‘underpopulated’ as WY only gets $0.91 back for every dollar collected.
The WSJ article is at a macro level but to see the real situation a reader would need micro level information. SC gets a lot more funding per dollar collected because wages are lower than currently in WY (due to the fracking job boom), plus there is a lot of government spending in SC due to military bases and federal contractors that WY does not get. The WSJ article does not show all those factors.