« Unions Vie to Organize Hospitals | Main | Wolfowitz v. Turkish Democracy »

August 04, 2003

Bush States Are Spending Hogs

Here's a basic issue on taxation and spending. The politics is not about how much to spend-- since conservatives love spending on military bases and roads -- or how much to tax -- since conservatives support all sorts of regressive taxes and fight cuts that go to the working poor.

No, the issue is what kinds of spending and which Congressional districts and states get the money. And the reality is that the real deficit spending in the country is in Bush states, where far more is spent there by the federal government than tax revenue is generated.

Here's the irony. So-called "welfare states" like California and New York more than pay their way in the federal system. In fact, the surplus taxes they pay subsidize conservative states like Arizona, Mississippi, Idaho and other states that consistently vote to cut spending that benefits the states paying the taxes, while increasing spending on their own services-- all while not paying their fair share.

See this press release by the Tax Foundation on their new report, "Federal Taxing and Spending Benefit Some States, Leave Others Footing the Bill." The full report is here.

Despite "aid" after 911, New York state is still getting only 85 cents in spending back for every dollar in taxes it sends to the federal government. And New Jersey, still reeling from the effects of 911 itself, only gets back 62 cents of every dollar it sends. Instead, spending on security and economic recovery in those states is used to subsidize "red states" like Alabama, Oklahoma, South Carolina and other free-loading states that bemoan welfare spending even as they collect their checks each year.

You might suspect that this imbalance is solely because states like New York or New Jersey have higher per capita incomes, so they are paying more taxes on equal federal spending. If that was all that was going on, that might just be solid redistribution of wealth from richer states to poor ones-- although that still the kind of policy denounced as "welfare" by the conservatives benefitting from it.

But it's more than that. On a per-citizen basis, many of those conservative states are not only paying less taxes per capita, they are receiving more spending. Check out page 9 in the main report for the expenditures per capita table. The average per capita spending by the government is $6326 per person. Some "red states" like Texas and Utah do receive less than that amount, but many like Kentucky, Mississippi and Wyoming receive much more.

And large industrial "blue states" inevitably receive less. California receives only $5592 per capita for its citizens, New Jersey only $5509, Illinois only $5373. New York is doing better on getting aid than a few years ago, but still ranks only 26 on list of per capita receivers of aid.

So the next time you hear about a "welfare state", think Bush-voting state.

Posted by Nathan at August 4, 2003 01:17 PM