Hunt & Associates P.C.

Poetic Justice? Federal Tax Revenues and Spending

taxes-646511_1280Even if it may not be poetic justice it is certainly ironic that to the extent the federal government redistributes federal tax revenues it receives from each state in federal spending among the federal states, the biggest losers are the states which consistently vote for candidates who support higher federal taxes.

While it’s generally accepted that American conservatives and “Red States” generally favor lowering levels of taxes while American liberals and “Blue States” generally support higher levels of taxation, a recent post by Paul Caron at TaxProf Blog indicates the irony of that distinction when the amount of tax revenues each state sends to the federal government is compared to the amount of federal revenue spending each state receives.

In fact, the so called liberal Blue States which reliably vote Democratic in presidential elections also almost invariably send significantly more revenue to the federal government than the federal government spends in those states.  Conversely, those Red States that reliably vote Republican in presidential elections also, with some exceptions, such as Hawaii, Vermont and Rhode Island, receive more revenue back from the federal government than they send in federal tax revenues.  Oregon, Washington and California are all among the top losers in this redistribution of wealth.

© 12/9/2016 Lawrence B. Hunt of Hunt & Associates, P.C.  All rights reserved.

 

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