10 red states that mooch off the federal

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10 red states that mooch off the federal government

Republicans claim they’ve had it with American socialism. Maybe they should return the tax dollars subsidizing them

Alex Henderson, AlterNet
09.20.2014•7:00 AM



AlterNet

One of the most hilarious talking points coming from far-right Republicans and the Tea Party is that when “red states” like Mississippi, Alabama and Louisiana are asked to bail out California or Massachusetts, that’s when they will finally become “fed up with socialism” and secede from the Union once and for all.

The problem with that meme is that it has no basis in reality: the more prosperous and Democrat-leaning areas of the United States are likely to be subsidizing dysfunctional “red states,” many of which are suffering from insufficient tax revenue and an abundance of low-wage workers who don’t have much to tax.

Tea Party Republicans like to point out that poor cities like Detroit, Baltimore and Camden, New Jersey are run by Democrats, but they neglect to mention that some of the most affluent parts of the United States—from Manhattan to the Silicon Valley and the San Francisco Bay Area to Cambridge, MA to Seattle to Chicago’s North Shore suburbs—are dominated by the Democratic Party. People in those heavily Democratic areas pay a lot of federal income taxes, and quite often, their tax dollars go to red states.

Earlier this year, the personal finance website WalletHub.com conducted an in-depth study of the amounts individual states are paying in federal taxes compared to the amounts they are receiving. WalletHub analyzed data from the Internal Revenue Service, the U.S. Census Bureau, the U.S. Commerce Department and the Bureau of Labor Statistics.

WalletHub’s research demonstrates that, as a rule, the states that are the most likely to rail against “big government” are the most likely to be benefiting from it.

Ironic uh righties? You inveigh against, lose your shit regularly over, 'hand-outs and welfare'; while putting your hand out, dependent upon the 'kindness of the very strangers' you lay your invective on.

Hypocritical too.

A few of the states in WalletHub’s study that were receiving the most tax revenue from the federal government are states that President Barack Obama won in 2012 (most notably, New Mexico and Hawaii), but most were hardcore “red states.”

And most of the states that, according to WalletHub, are taking less from the federal government than they are paying in are “blue states” that Obama won in both 2008 and 2012, including California, Massachusetts, Delaware, Illinois, New Jersey, New York and Minnesota.

WalletHub’s research bears out comparable figures released by the nonpartisan Tax Foundation in the past: analyzing IRS data, Tax Foundation has found, more than once, that red states are likely to be the biggest recipients of federal tax money.

Below are 10 red states that take full advantage of the federal government and would be much worse off without the “coastal liberal elites” they love to complain about.

1. Mississippi : Mississippi is one of the most Republican states in the U.S.: Republicans dominate the state government, and not since Jimmy Carter’s victory in 1976 has a Democrat carried Mississippi in a presidential race. “Fiscal responsibility” is a recurring theme in Mississippi politics, where Democrats are often characterized as people who couldn’t balance a budget if their lives depended on it.

Yet the reality is that Mississippi is one of the most blatant examples of a state receiving more federal tax money than it gives: WalletHub finds that for every dollar in federal taxes Mississippi pays, it receives $3.07 from the federal government. A 2007 report from the Tax Foundation found that Mississippi was receiving $2.47 from the federal government for every dollar it was paying in.

The fact that Mississippi has a hard time making ends meet without help from Washington, DC stems from being a so-called “right to work” state, meaning it has a very low rate of unionization and plenty of low-wage jobs.

Mississippi is one of the poorest states in the country, and Republican policies in that state—hostility to unions, opposition to raising the minimum wage at either the federal or state level, tax breaks for the wealthiest 1% of Americans—will likely keep Mississippi from being a substantial contributor to federal income taxes.

2. Alaska : Alaska didn’t become part of the U.S. until 1959, and since then, it has gone Republican in every presidential race except 1964 (when Alaska favored Democrat Lyndon B. Johnson over Republican Barry Goldwater). A bastion of hard-right politics, Alaska is the state where Sarah Palin was elected governor in 2006.

But when it comes to “small government,” Alaska Republicans don’t practice what they preach: according to WalletHub, Alaska receives $1.42 from the federal government for every dollar it contributes. Tax Foundation’s research showed Alaska receiving $1.93 from Uncle Sam for every dollar paid in.

Alaska Republicans love to rail against the federal government, but the reality is that Alaska needs federal tax revenue badly in order to function.

Alaska is infamous for its harsh winters, which put considerable wear and tear on the state’s infrastructure—and the money for that much upkeep and maintenance has to come from somewhere. That somewhere is Boston, Santa Monica, Brooklyn, Seattle and all the other places that are full of upscale Democrats Palin considers “un-American."

3. Alabama : Like Mississippi, Alabama is a state that hasn’t given a Democratic presidential candidate its electoral votes since 1976. Alabama is one of the most Republican-dominated states in the U.S., and it is also a state that is very reliant on the federal government. According to Wallet Hub’s study, Alabama receives 37% of its revenue from the federal government and receives $3.28 for every dollar it pays in federal taxes. Tax Foundation’s data showed Alabama receiving $2.03 in federal tax money for every dollar it was paying in.

There are ways in which Alabama could become less reliant on Washington, DC: raising the minimum wage and having a more unionized workforce would generate more income tax revenue. So would raising income taxes on Alabama’s 1%. But Alabama is a so-called “right to work” state, and a workforce that is generally underpaid and overworked isn’t going to generate a lot of federal income tax revenue.

4. Louisiana : In Republican-dominated Louisiana politics, it is fashionable to bash “big government liberals” who live in San Francisco or New York City. But when Louisiana Republicans do that, they are biting the hands that feed them. According to Wallet Hub’s research, Louisiana receives $3.35 from the federal government for every dollar it pays in; 44% of Louisiana's funding, WalletHub says, comes from Washington, DC.

Louisiana, under Republican Gov. Bobby Jindal, is another “right-to-work” state, and a state with so many underpaid workers is naturally going to have a lot less income to tax. So instead of hating the “limousine liberals” in Seattle or Boston for voting Democrat, Louisiana Republicans should thank them for all the federal income tax revenue they are getting from them.

5. Indiana: When Barack Obama won Indiana’s electoral votes in 2008, it was an anomaly: Indiana, which went Republican in every presidential election from 1968-2004, is one of the most conservative states in the Midwest and is much more Republican than Minnesota, Wisconsin, Illinois or Michigan.

Pundits have often said that when it comes to politics, Indiana is “more southern than the South.” But the disdain that Indiana Republicans often express for “big government” rings false because according to Wallet Hub, Indiana receives $2.01 from the federal government for every federal tax dollar it contributes and receives 33% of its funding from Uncle Sam.

Indiana Republicans can hate coastal Democrats all they want, but without the federal tax revenue Democratic areas generate, Indiana would have a hard time functioning.

6. Montana : Montana has a long history of going Republican in presidential elections. Between 1952 and 2012, Montana went Republican in every presidential race except 1964 and 1992. But for a state that is so conservative-leaning, Montana receives a lot of help from the federal government: WalletHub’s research shows that Montana receives $1.55 from the federal government for every dollar it contributes (the Tax Foundation’s 2007 report found that Montana’s intake from Uncle Sam was $1.92 for every dollar paid). Montana faces the same challenge as Alaska—long, harsh winters that can put considerable stress on its infrastructure—and the idea that Montana could function without tax revenue is pure fantasy.

7. South Carolina : The fact that South Carolina hasn’t gone Democrat in a presidential election since 1976 is a badge of honor to the state’s GOP. And Republican Gov. Nikki Haley once boasted, “I love that we are one of the least unionized states in the country.”

But that is nothing to be proud of, especially in light of the fact that non-union workers tend to have lower wages and therefore, contribute less tax revenue. The Tax Foundation found that South Carolina was receiving $1.92 from the federal government for every federal tax dollar it was contributing.

Haley doesn’t think much of liberals, but considering that Delaware, Illinois, New Jersey, Minnesota and New York State—all of which Obama won in both 2008 and 2012—are giving more tax dollars to the federal government than they are receiving, she might want to reconsider and start thanking them for their help.

8. West Virginia : Although West Virginia presently has a Democratic governor (Earl Ray Tomblin) and has a Democratic majority in its state senate (most of them center-right Blue Dogs), it is still a conservative-leaning state with a strong Republican influence. Republicans have carried West Virginia in the last four presidential elections (Mitt Romney won 62% of West Virginia’s vote in 2012), but that doesn’t mean that the state doesn’t receive a lot of help from the federal government:

WalletHub described West Virginia as a state that receives $2.22 in federal tax revenue for every dollar it pays, and the Tax Foundation’s figure in its 2007 study was $2.57 received per dollar paid.

Poverty has a lot to do with that: West Virginia is one of the poorest states in the country, with 17.6% of its population living in poverty from 2008-2012 compared to 14.9% nationwide (according to the U.S. Census Bureau). And with so many West Virginians living in poverty, they simply aren’t going to be a major source of income tax revenue.

9. Tennessee : One of the ludicrous talking points from Republicans is that the poor aren’t paying enough taxes. Actually, the poor do pay a lot of taxes, from sales taxes to taxes on utilities. But according to Republicans, the poor are freeloaders because they aren’t paying enough federal income taxes—and one way to balance state budgets, they cluelessly argue, is to cut state services and raise state taxes on the poor.

Republicans flunk math, however, because someone making $7.25 an hour is going to have a lot less to tax than someone making $30 or $40 an hour.

And therein lies the budgetary problem for a so-called “right-to-work” state like Tennessee: too many of its residents are working low-paying, non-union service jobs that generate a lot less sales and other state tax revenue than the unionized jobs Republicans are so bitterly opposed to. Tennessee, according to WalletHub, receives $1.64 from the federal government for every federal tax dollar it contributes—and WalletHub notes that 41% of Tennessee’s funding comes from Uncle Sam.

10. Kentucky : Kentucky, despite having a two-term Democratic governor (Steve Beshear), leans Republican: although Bill Clinton won Kentucky’s electoral votes in 1992 and 1996, that state has gone Republican in every other presidential race since 1980. Mitt Romney carried Kentucky by 22% in 2012, and many of the Democrats who hold office in the Bluegrass State are center-right Blue Dogs.

But as widespread as talk of “small government” and “fiscal responsibility” are in Kentucky, WalletHub’s research shows that Kentucky receives $2.39 from the federal government for every dollar it pays.

According to WalletHub, 35% of Kentucky’s revenue comes from Washington, DC. And the Tax Foundation found that Kentucky was receiving $1.75 from the federal government for every dollar paid.