Some States Pay More. Some Get Less.

Some States Pay More. Some Get Less.

There appears to be another stark division between Republican and Democrat states that few people seem to realize or understand.  

The Basics:

  • The amount of money going into the national treasury from each state is NOT equal to the amount of money sent back to each state.
  • The reason is the people living in some states have very high income.  The state these people live in becomes a donor state because the occupants of that state are taxed more because their total yearly income is high.
  • The Democratic states seem to have high income earners, for some reason, and thus are taxed more and more money from that state goes into the national treasury which explains why some states are considered donor states.
  • The money in the national treasury is then withdrawn in uneven portions and given back to each state due to federal programs.
    • Individual Social Security
    • Medicare
    • Highway spending
    • Education
    • Federal wages
    • Federal contracts
  • Each state thus receives a sizable amount of assistance money each year but the amounts vary by state.

“Federal aid is allocated to states for a variety of purposes, primarily to supplement state funding for programs or projects deemed to be of national interest, such as Medicaid payments, education funding assistance, infrastructure assistance, and more. Some federal aid is awarded in the form of competitive grants, while other federal funding is given according to formulas established by law. Formula grants usually incorporate factors like population size, poverty statistics, and state matching dollars for distributing federal aid among states. Competitive grants are awarded on a discretionary basis and are more likely to fluctuate from year to year.”

  • There is not a balance of payments to each state.  What a state pays to the federal treasury and what it gets back is not the same.  Here is a partial list of the results:
    • New York is a big giver.
    • New Jersey is a big giver.
    • Massachusetts is a big giver.
    • Connecticut is a big giver.
    • Kentucky is a big recipient.
    • West Virginia is a big recipient.
    • Mississippi is a big recipient.
    • Alabama is a big recipient.

        Note that the giver states seem to be Democratic while the recipient states appear to be Republican.  




Posted July 13, 2021

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