The Redistribution of Income Occurs Among the States, Too
Most taxpayers know their taxes are being redistributed in a way that would make Marx and Lenin proud although they may not be aware of the extent. We’ve growled several times of how Steven Malanga in his book The New New Left divides us into taxpayers and taxeaters. Now, the Tax Foundation, which has studied trends in federal taxing and spending benefits, identifies “beneficiary states” and the “donor states” that pay the bill. Their press release, and accompanying study, provide the details (with link to the full study), According to Scott Hodge, president of the Tax Foundation, “The main culprit is not lazy congressmen who don’t bring home enough pork, but rather the progressive income tax.”
In 2004, the biggest beneficiary was New Mexico, which received $2.00 from Uncle Sam for every $1.00 paid in taxes. Some other “beneficiary states” were Alaska ($1.87), West Virginia ($1.83) and Mississippi ($1.77). The highest “donor state” was New Jersey, which received 55 cents back for every $1.00 paid in taxes. Virginia ($1.66) was near the top with a significant increase from 1994 when it received $1.40 in federal spending for every $1.00 paid in taxes. Need another reason for the FairTax?