Myth busted: Turns out that CA is a net BENEFICIARY of federal dollars

One of the favorite responses of defenders of high tax
states is the lame claim that such rapacious states are net payers to the
federal government — they pay more to D.C. than they get back. This is largely
based on a deeply flawed ECONOMIST blog item.

Here’s an up-to-date comparison of the states. Turns out
that, contrary to claims by progressives, CA gets more back from D.C. than it
pays — $1.09 back for every dollar paid. Oddly enough, the same ratio is true
for Washington state — which has zero state income tax. Liberal New York state
is exactly even in its ratio of taxes vs. benefits. Evil Texas — the
“Great Satan” for liberals — gets only $.91 back for every federal
dollar “contributed.”

I suspect this ratio is even better for CA than indicated.
It appears that the definition of “federal benefits” does not count
military payroll and spending in a state, nor federal government contractors. I
can’t judge the full state of CA on this basis, but CLEARLY San Diego County is
a HUGE net beneficiary of federal spending. 

One recent U-T newspaper story asserted that one in four
jobs in the county are defense related, though the study cited included the
whorey “multiplier effect.” But even after backing out the suspect
multiplier benefit, clearly we rake in the federal bucks in my county. And yet
just about every local San Diego area government STILL has fiscal problems –
unfunded liabilities, reduced services and high taxes. 

And then, of course, there is the great state of California
. . . .

http://www.ritholtz.com/blog/2012/02/is-your-state-a-net-giver-or-taker-of-federal-taxes/


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2013-01-31 21:45:16

Source: http://blog.stoptaxingus.com/2013/01/31/myth-busted-turns-out-that-ca-is-a-net-beneficiary-of-federal-dollars.aspx?ref=rss