I hear sometimes that a big outrage is that money is sent to Washington and "we" don't get it back. One can value what government provides as one wants, but a simple way of looking at is to take the actual amounts sent by each state's taxpayers to Washington and then what Washington sends back in actual amounts to that state. This information is compiled by the somewhat non-partisan but essentially conservative Tax Foundation - taxfoundation.org. They tend to protect that data but they now have the 2005 numbers available for free. Here is a link.
So what does this show?
Here is the list, ranked by dollars back to dollar sent:
New Mexico $2.03
West Va $1.76
N. Dakota $1.68
S. Dakota $1.53
S. Carolina $1.35
N. Carolina $1.08
Rhode Island $1.00
New Jersey $.61
Sorry for any formatting issues, but I have no patience for that.
The list shows:
1. Income matters. The states with higher personal income send more to Washington DC than states which are poorer. Texas, for example, has become richer and thus it has dropped relatively recently below $1 back for every $1 sent.
2. There is a general transfer of wealth in this country. BUT, it runs from the richer states to the poorer states and runs almost exclusively from Democratic states to Republican states.
I point this out again: one major wealth transfer in this country runs from Democratic run states to Republican run states. It's not even close. Look at the list. Break even is RI and that is #33. Look at Illinois; they get back 3/4 of every $1 they send.
What this also means is that when S.Carolina (#16 at $1.35) uses incentives to draw business from Washington state, they're in part being subsidized by Washington (#38 at $.88). Competition between the states may be a great idea but it's certainly not being done on an even playing field.
I've heard offered the idea that states should get back what they send. I'm all for it: the GOP run states would be crushed and would have to change their policies to generate higher income, perhaps by investing more in human capital and not trying to keep wages and benefits as low as possible. My state could really use the extra 18 cents per dollar we send to the federal government.
An irony, of course, is that we hear this kind of rhetoric almost exclusively from GOP run states. The governor of Texas has complained notably about this and yet Texas is barely below $1 back - and only crossed that line in recent years - and every single state below them on the list is Democratic , with the possible exception of Nevada (and sometimes Colorado). And yet Republican run states are clearly the ones who benefit from the current system.
So again, let's equalize funding so each state gets what it sends in. I'm all for it.