How Much Money?
In the previous post I pointed out that, “California, the world’s fifth largest economy, … gets only $.78 back on every $1.00 it pays to the Treasury.” Just how much money is California donating to the poorer states? The State’s Gross State Product is about $1.4 Trillion, and in 2003 California residents and corporations paid $227 billion in gross taxes (Excel file) and recieved $36.2 billion in refunds (Excel file), for a net tax bill of about $191 billion. About 22% of that, or $42 billion dollars, went to the states on the winning side of the federal transfer game.(*) And the states that benefit the most from federal transfers are Red by nearly a 3:1 margin (based on slightly dated numbers here and here.)
That was fun. Let’s do another. Net federal taxes paid by Illinoians in 2003 were $91 billion, $21 billion of which went to subsidizing the “welfare states.”
One more: Massachusetts, once home of the American Revolution but now apparently not part of Real America. Those noble semi-Americans handed $12 billion over to real America.
(*) To put this $42 billion gift into context, note that California’s $38b deficit was the primary reason for Gray Davis’ recall.