The following story gives the reader the idea that there are "winners" and "losers" when it comes to federal taxes and revenues, and federal expenditures: that some states (or presumably, the people of some states) are getting a lot more back than they pay in. In other words, the story wants to push the idea that some states' people and politicians are sponging off the rest of us; and therefore, some states' people and politicians are victims of pork and mis-assigned federal spending: that we are not equal.
Following the story is my commentary, originally written for "www.ThePriceofLiberty.org" and rewritten for this blog.
Stupid govt tricks:
Most states get more fed funds back than is paid in taxes
Tennessean
“The federal government’s system of taxing and spending works out well for people in states like New Mexico, Mississippi and West Virginia. Not so well for those in Delaware, Minnesota and New Jersey. New Mexico received $3.10 in federal spending for every tax dollar the state sent to Washington in 2005 — more than any other state — according to an Associated Press analysis of new federal data. Delaware fared the worst, receiving just 42 cents for every tax dollar sent to Washington. It was followed closely by Minnesota, which got 46 cents, and New Jersey, 57 cents. In all, 30 states and the District of Columbia received more money from the federal government than they paid in federal taxes. … No wonder there’s a federal budget deficit.”
[www.FreedomNetDaily.com Editor’s note: Actually, all 50 states got “more back” than they sent, because the states don’t send money to DC … the people do. One gang of thugs sending money to another gang of thugs does NOT equal paying back the victim - TLK] (10/09/07)
This comes up every year, and it is a bogus number and frankly, a bogus story.
First, of course, we are ALL losers: people and their local and state governments, when it comes to federal tax revenue. To begin with, there is the outright waste due to corruption, pork-barreling (a form of corruption), foreign spending, and the thousands of things that the Federal Government spends OUR money on that is not authorized by the Constitution. But we also need to remember the Federal Government's overhead costs: for every dollar sent to DC, figure that at least 10% never makes it back outside the Beltway, and a big chunk of what does is used to pay Federal bureaucrats in various cities, from the Federal Center in Denver right down to the local USDA, USDI, USDHS or whatever other agency is administering the grants and loans which seem to be an ever-bigger part of the federal budget. And frankly, some of it just seems to disappear. That said, let's look at the story in more detail, and the way government spending works.
In the report cited in the story, every dollar in the federal budget spent in a state is considered, whether it is pork or really a legitimate federal expense.
The report and story also presents many western states as "welfare queens" when the big federal expenditures exist. Once more, this is garbage. It is no wonder that the feds have to spend a lot of money in those states, for everything from salaries to paying claims, because more than 50% of most of these states is still owned by the federal government. For example, NM – cited as the biggest “winner” - is the site of massive military installations including Los Alamos National Laboratory, Kirkland AFB, White Sands Missile Range, Cannon AFB, Holloman AFB, Sandia Base and Laboratories, and much of Fort Bliss. It is also home to dozens of Indian Reservations and therefore a huge BIA and IHS workforce, and the Federal government owns outright 41.8% of the whole state! With a relatively small population (1.9 million) and below the national average for per capita income, is it any wonder that the ratio is 3.1 to 1?
Even when considering just constitutional expenditures (which might be, what, all of 5% of the total?), there is no way, and no reason why federal spending of our tax dollars should be doled out equally in every state in the Union. For example, people sometimes are surprised to find that – guess what, most spending for the US Navy and Marine Corps is – you guessed it! – spent in states that have a coastline! States like Delaware and Rhode Island, for instance, don't have a lot of Air Force bombing ranges or Army artillery ranges, either. And you don't find Armored Divisions stationed in Pennsylvania or Hawaii, much.
(And as far as non-constitutional activities, it is just as bad. There are a whole lot more federal employees in states that are mostly owned by the feds, while states without much government land (like CN or RI) don’t have those nice juicy federal payrolls!)
Not only that, but today, and for the last 50 years of “Mutually Assured Destruction”, it was states like Wyoming, North and South Dakota, Montana, and Nebraska that bore the greatest risk of enemy attack in case of a Soviet/Russian attempt to knock out US nuclear forces in a First Strike. And fatuous comments about “all 50 states got ‘more back’ than they sent” are nothing but an indication that the commenter isn’t thinking things through or doesn’t understand the economy. Yeah, as the article points out, it is the _people_ of the state who pay the taxes, not the “State” – State governments pay virtually nothing to the FedGov.
(When we look at the unconstitutional spending, we see our stolen money wasted in even more ways: federal grants to "public schools" for example, from Preschool right up to graduate and post-grad institutions, welfare (both personal and corporate, of all sizes, including things like farm subsidies), subsidized medicine of all kinds (Medicare and Medicaid being just two of many, MANY programs), and all the other socialist, nanny-state bilge.)
But at the same time (although a lot of federal money is paid to the states), most federal expenditures are payroll and contractor services and goods. That is what makes the runaway government spending so hard to fight. In part, we ALL benefit - either directly or indirectly - from this spending. I may never work an hour for a federal or even state or local agency, but many of the businesses and individuals I DO work for in turn get some of their income (often a LOT) from selling things to the guvmint: from employees (selling their personal services, 8 per day, 40 per week, etc.) to gravel pits that sell rock to counties who pay for it with a mix of taxes funneled through the courthouse (property taxes), statehouse (fuel taxes and income taxes), and the Capitol (income taxes, fuel taxes, etc.). It is the same for book stores, furniture stores, furniture makers, Radio Shacks, gas stations, etc.
What is the solution? First, cut government spending, especially at the Federal level, back: cold-turkey. End any spending for unconstitutional activities; transfer that sort of stuff to state and local control, or better yet, the private sector (profit and non-profit). Second, eliminate taxes. Then all that money stolen from our pockets will be used in tens of millions of ways to create a true free-market economy that will very rapidly absorb all those suddenly-unemployed government workers. Simple - but also incredibly difficult. That is the same thing momma birds tell the babies as they kick them out of the nest.
