Wednesday, May 29, 2013

Moocher Paradise

Bloomberg:
Every year, about 30 states receive more in federal spending than they pay in taxes, while the other 20 states bankroll the federal government. New Mexico and Mississippi are usually the greatest net beneficiaries of spending, receiving roughly $2 in spending for every dollar paid in taxes. New Jersey and Illinois are the greatest net contributors to the federal government, receiving about 60 cents in spending for every dollar paid in taxes. States in the Northeast, Great Lakes and Pacific Coast generally lose money to the federal government, while Southern and Great Plains states benefit.
If we think of states as voters -- and they are in presidential elections due to the Electoral College -- then the Moocher Myth is backward. Starting with the 2000 election, the states that have benefited the most from federal spending have voted Republican. Those that pay the most in taxes per dollar received in spending vote Democrat. This paradox occurs even controlling for a state’s per-capita income, total population, racial composition, education level and defense spending.
At the county level, the Moocher Myth is more intriguing. The Census Bureau counts federal dollars in five broad categories: retirement and disability payments, salaries and wages, procurement contracts, grants, and other direct payments. In 2004 -- the last year the Tax Foundation calculated the tax burden per county -- the counties that received the most per person in retirement or grants had higher vote margins for Democrat John Kerry.
But the counties that received the highest per-capita spending in the category “other direct payments” voted for George W. Bush. “Other direct payments” includes Medicaid, food stamps, crop subsidies, housing assistance and many other programs that people generally think of as “welfare.”
It remains a mystery why places that receive the most per person in federal spending, particularly on welfare programs, vote in presidential elections for the party that wants to cut those programs. The most likely suspects are Franklin Roosevelt, Lyndon Johnson and the Framers of the U.S. Constitution.
I knew it was the damn Democrats that made us righteous rural Americans overly dependent on government spending that is taken from the well-off in major metropolitan areas.   Well, they and the Founding Fathers.

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