Sunday, June 21, 2009

Federal taxes vs. Federal Outlays by State

Often times, when reading various articles about tax policy, I see references that such-and-such a state pays more in federal taxes than it receives back. Today, I read that California gets only $0.80 back for every $1.00 it sends to Washington. People in Connecticut often point out that Connecticut gets somewhere between $0.60 and $0.70 for every dollar spent.

Often times, people say that Republican-leaning states in the South take much more than they provide, while more liberal states in effect subsidize the Republican states.

For Connecticut and New York, this has almost certainly inverted due to the AIG bailout alone. AIG received $170 billion in bailouts: this would almost all be going to New York and Connecticut. AIG is headquartered in New York, and its financial products group that caused most of the problems was in Connecticut. $170 billion is $7,394 for every man, woman and child in the two states, which should easily make up the difference between what's paid in and what's paid out.


Chris MC said...

an email address for you would be useful...

Anonymous said...

I think it is disingenuous to assume that bailout money benefits all denizens of a state equally. Much more interesting to me are the federal outlays for things such as medicaid and education, infrastructure projects, etc. As one of the beneficiaries of the largest public works project in history (the Big Dig), I'm cognizant of the implied mea culpa here. But it would be a mistake to assume that all the citizens of Massachusetts benefited equally. Arguably there was little benefit at all beyond the "Boston Beltway".

To quote Adam Smith: "The prudent man always studies seriously and earnestly to understand whatever he professes to understand, and not merely to persuade other people that he understands it."

It would be prudent of you to do some research and post pointers to some data regarding federal outlays to and receipts from, the varipous states.