Asymmetrical Information

Personally I would just be happy if the blue-staters realized and accepted how much they benefit from the government, paid for by the red states.

It's bad enough we subsidize them and they show no gratitude but it's really irritating when they claim to be against government handouts!

Now, a swinging single life in Pittsburgh? I did not know that existed. :)

Jane --

Minor quibble...

Not sure how Washington gets a tax windfall from Microsoft options....Washington has no personal income tax, and businesses pay tax on their gross receipts (which wouldn't include option money), not net profits. Or did I misunderstand you?

I think she means federal tax paid by folks living on Lake Sammamish.

Subtle? Jeez, I must be losing my touch if you thought that post was subtle.

BTW, I'm with GT. As I mentioned in the post, I don't mind the progressivity, I just wish that rural conservative would quit griping about the culture and lifestyle that obviously produces most of the money in America and then gives a whole bunch of it to them.

Perhaps the red staters wouldn't be complaining so much about big government if they got no more than their fair share of it?

All this talk from all sides about "handouts" is just a bit loose, isn't it? Kevin's study treats payment by the federal government for goods and services rendered as if they were transfer payments.

Michael M., Jane must have meant federal income tax. Generally Microsoft stock options are bought and purchased the same day, thus making the profits subject to payroll tax. If the options are purchased, held for two years and then sold they'd be taxed as capital gains at a lower rate.

Arrgh, last post should have read:

...Microsoft options are bought and SOLD the same day...

(chanting, "preview is my friend")

Hmm, Kevin and other liberals finally discover that the recipients of wealth transfers often become resentful and act in not particularaly grateful ways.

Kevin,

I'm not sure I understand you. Are you saying that gay marriage and the absence of the Ten Commandments in public spaces in the creation of wealth?

Because it seems to me that the cultural issues that red-state conservatives gripe about have little or no relation to economic growth, while the small-government policies red-staters advocate do. Personally, I'd call for a truce on cultural issues: let gays get married, and stop trying to ban guns. Fair compromise, guys? Now we can work on real issues.

I also doubt that it makes sense to say that red states are "getting" the money taken from blue states. If you want to end farm subsidies, I'm with you. But if you think Montana should get fewer highway funds or Wyoming should have its military bases shut down, that's pretty foolish. The benefits from transportation, military protection, etc. are indivisible and acrue to all of us.

Kevin,

I'm not sure I understand you. Are you saying that gay marriage and the absence of the Ten Commandments in public spaces in the creation of wealth?

Because it seems to me that the cultural issues that red-state conservatives gripe about have little or no relation to economic growth, while the small-government policies red-staters advocate do. Personally, I'd call for a truce on cultural issues: let gays get married, and stop trying to ban guns. Fair compromise, guys? Now we can work on real issues.

I also doubt that it makes sense to say that red states are "getting" the money taken from blue states. If you want to end farm subsidies, I'm with you. But if you think Montana should get fewer highway funds or Wyoming should have its military bases shut down, that's pretty foolish. The benefits from transportation, military protection, etc. are indivisible and acrue to all of us.

First, there is "some point" to federal taxation even in the absence of transfers between the states. Some government services are most efficiently provided at the national level -- defense being the classic example.

Second, I don't wish to transfer part of my income to red states. I wish to transfer it to poor kids, via social programs that actually work. I don't particularly care where the poor kid lives. The difference between a poor kid in Los Angeles and a poor kid in Boise is that my federal tax dollars subsidize the kid in Boise.

Third, while it's true that California is a wealthy state on a per-capita basis, we are also a poor state in terms of the percenatage living below poverty. So of course our federal taxes are high. But spending should also be high, and it is not.

The basic problem with Jane's analysis is that the overall federal tax structure, including OASDHI, is only slightly progressive.

"I don't particularly care where the poor kid lives. The difference between a poor kid in Los Angeles and a poor kid in Boise is that my federal tax dollars subsidize the kid in Boise."

So far as I can tell, your tax dollars subsidize both. Kevin's statistics are on a per capita basis. The are more poor people per capita in the net recipient states than in the donor states. The poor kid in LA gets government subsidies, but there are fewer of them per capita (the metric used in Kevin's analysis) in LA.

"The are more poor people per capita in the net recipient states than in the donor states."

The complicating fact, as Megan points out, is cost of living. Many of the poorer states are just plain poorer, but they also have a lower cost of living. However, it would be very complicated to try to take that into account in the federal tax code, and possibly counterproductive in the end.

"Personally I would just be happy if the blue-staters realized and accepted how much they benefit from the government, paid for by the red states."

Personally I would just be happy if the red states would stop voting to subsidize the ungrateful blue staters, then. :)

Actually, in a sort of game theoretic sense, it makes sense anyway that the states that are the most gung-ho about increasing federal entitlements get a rawer deal than the ones that have to be sweet-talked into voting for them.

In any case, I don't want the entitlements and subsidies, I don't vote for them, and I feel free to remain ungrateful for policies I think wrong, even if people in my state or even I benefit.

Leigh and Katherine --

Thanks. How right you are.

Note to self: Do'h. BART!!!

I think I see a solution here.

Blue staters supposedly want more government spending. Red staters supposedly want smaller government.

So Congress can just reassign that spending, back to the blue states (you know... the ones that paid for it). That way everyone's happy -- the red states get less government, the blue states get more, and we don't even have to raise taxes to do it. :)

"If some states didn't pay out more than they got back, and others less, then there wouldn't be any point to having federal taxation, because it would be just as efficient to tax and spend locally."

I'm pretty sure each state individually funding its own military would be a bad idea.

Indeed it is true that there are federal programmes which would be less efficiently funded by the states. But if we had to make sure that each state got back every dime it paid out in taxes as military spending or what have you, what would be the difference between funding it at the Federal level or funding it locally?

Has anyone seen a breakdown of these figures? I find some of the numbers a bit suspicious, and wonder what goes into these calculations, and what's left out.

For example, look at Florida. It shows as receiving $1.01 for every $1 it sends Washington. Now Florida has several big military bases and it has lots of senior citizens. Its per capita income isn't especially high (at 29.6k on Jane's chart). Plus there's all those Coast Guard types picking up Cuban refugees and drug dealers. So why is Florida receiving so little money? Maybe Social Security isn't counted?

Is military pay allocated to the state where a guy is stationed (and what if he's stationed in Iraq, or Japan?), or where he claims residency? (And if it's the latter, Florida should still get a boost, because many military claim Florida as their home state to avoid state income taxes.)

I also note that DC doesn't show on Calpundit's map, or on Jane's chart. What would its ratio be, something like $10?

My guess is that these numbers relate more to direct Fed-to-state transfers than all the other direct-to-person transfers we've been talking about. And I can't see getting worked up about, or trying to draw grand conclusions from, numbers with such a limited provenance.

Dan:
Blue staters supposedly want more government spending. Red staters supposedly want smaller government.

So Congress can just reassign that spending, back to the blue states (you know... the ones that paid for it). That way everyone's happy -- the red states get less government, the blue states get more, and we don't even have to raise taxes to do it. :)

The better way to accomplish that is for the federal government to cut federal taxes while the blue states raise state taxes.

[How come the left wingers got to be 'blue' and the right wingers 'red'? If memory serves, at least one network colors its big election-night map each way. Why did the wrong one stick?]

Great post Jane. I also point out that Kevin's conclusions are just plain faulty due to his collectivizing states as basically persons:

states are not individuals

Kevin,

I'm not sure how anyone with a straight face can say, "I just wish that rural conservative would quit griping about the culture and lifestyle that obviously produces most of the money in America and then gives a whole bunch of it to them," from the data you have cited. There is absolutely no way that conclusion can be reached.

Dan -- I think you might find it difficult to effectively set, say, social security benefits, based on state of residence, what with mobile seniors. And I should think you'd find it very hard indeed to pick up Fort Benning and move it to New Jersey or Connecticut to even out the spending balance.

It's true that poor kids in Los Angeles benefit from federal social programs. But on average California taxpayers send a net of $700 + dollars out of state every year. So California dollars are not used to subsidize poor kids in Los Angeles (LA county, by the way, is more populous than 42 states).

On net there would be 700 extra dollars for these kids (or for alternatives like business friendly tax cuts) if the same services were provided locally. As it is we continue to do things like build roads to nowhere, and transfer revenue from poor LA kids to longlived middle class old folks in Idaho.

[How come the left wingers got to be 'blue' and the right wingers 'red'? If memory serves, at least one network colors its big election-night map each way. Why did the wrong one stick?]

Bill, a couple of semi-serious answers to your question. Both assume the presumably liberal media and intelligentsia are responsible.

1) Red has associations with blood, violence, passion, and unreason, whereas blue has associations with intellect, logic, and dispassionate reasoning. Since Republicans don't think and are salivating to kill someone (black, gay, Muslim, whatever), whereas Democrats are selfless technocrats, red and blue, respectively, are the appropriate colors.

2) Since Republicans demonized the last "Red" political movement, Communism, the paranoid anti-Communist rantings of their recent past can best be mocked by tagging them with the color red.

I don't think the map means what people seem to think it means. Kevin implies that welfare is going to those who are against it, but I won't believe it until I see a more detailed explanation of tax expenditures per state.

I think Jane's points on population differences in red/blue states have validity.

[How come the left wingers got to be 'blue' and the right wingers 'red'? If memory serves, at least one network colors its big election-night map each way. Why did the wrong one stick?]

New Zealand, Australia and Britain use red for Labour and blue for their respective 'right-wing' (National, Liberal, Conservative) party.

And we have state-funded media (TVNZ, BBC), so I don't think 'liberal' bias comes into it.

Maybe it's just another case of America being contrary - cf Imperial/Metric, spelling, driving on the wrong side of the road, using 'liberal' to mean 'left-wing'.

Boban -- then you should lobby for what Bill Woods suggests: lower federal taxes,higher state taxes for those states that want them or will tolerate them, the proceeds to be distributed as their citizens see fit, and don't let the door hit you in the ass for those who don't see fit.

Jane: But if we had to make sure that each state got back every dime it paid out in taxes as military spending or what have you, what would be the difference between funding it at the Federal level or funding it locally?

Ironically, that's precisely the system the Framers wrote into the Constitution. We didn't have a federal income tax until 1913, with the passage of the 16th Amendment.

"I'm pretty sure each state individually funding its own military would be a bad idea."

Though the images of how the more, ah, peace-oriented states would spend their military budgets are certainly good for a giggle or two.

Jane, here is what you are missing:

Let's say I'm a liberal in blue-state Massachusetts who believes in having a sizable welfare state. I could either advocate that the system be run at the state level or national level. Now if it was run at the national level, because Massachusetts is a wealthy state, Massachusetts will on the whole lose a little money to the poorer red states, as you have pointed out.

But, looks what happens if it is funded at the state level. Massachusetts must raise taxes considerably to fund the welfare state. Its neighbors, New York, Connecticut, and New Hampshire notice this and keep their taxes low. Businesses then move out of Massachusetts in mass to areas with lower taxes while the poor stay to take advantage of the social programs. Massachusetts' tax base erodes and it faces a major fiscal crisis forcing it to cut taxes and abandon the welfare program. Meanwhile New York, Connecticut, and New Hampshire are booming and barely need a welfare state. This is basically a race to the bottom scenario. The result is that if we want to have any sort of welfare state, it must be done at the national level and not the state level.

"The result is that if we want to have any sort of welfare state, it must be done at the national level and not the state level."

The federal government only needs to set minimum levels of welfare; the states can then raise and distribute the funds themselves.

No race-to-the-bottom and a smaller federal governnment. Everyone wins! (except the VRWC).

"The result is that if we want to have any sort of welfare state, it must be done at the national level and not the state level."

It's funny how the Left, which has fetishized the right of people to vote to the point where they view the idea that people should be able to read and understand the ballots they're filling out with towering outrage, seems to fear the idea that people might choose not to follow their ideas on a local level to the point that they would prohibit local choice in those areas. When federal constitutional rights are implicated (at least the ones which actually *are* constitutional rights), I approve of this attitude. When such rights are not implicated, it's a naked power grab, and should be slapped down as such--by constitutional amendment if necessary to make it absolutely clear to the moonlighting clown college that is the left wing of the federal judiciary.

Uhm, wrinkles I have no idea how to iron out:

The guy in the hi-cost urban area probably has a bigger mortgage (on a smaller house!) than the guy in the low-cost rural area. If they both make the same income, the guy with the bigger mortgage gets the bigger (itemized) income tax deduction, and so pays less tax. The FICA tax is the same. Is it fair to say, then, that the rural homeowner is "subsidizing" housing for the urban homeowner?

The worker in a low-population-density area most likely has a longer commute to work than the worker in an urban area. Most likely he drives, so, buys more gasoline, and pays more federal gasoline tax. This tax funds both highway maintenance and construction, AND various "mass-transit" systems for the urban areas. Is it fair to say that the driving commuter is subsidizing the bus-riding, subway-using, light-rail-preferring urban worker?

It makes me smile to see Democrats channeling their inner federalists.

And I can make them feel even better about it. I grew up in Mississippi, one of those "red" states that seems to be on the recieving end. Well, all of that federal tax money you send there for social programs and the like? It is not doing a damn bit of good.

Hopefullly the next time someone writes a constitution, they will lay out a set of specific powers that congress has that will be for the good of the nation and leave the activities that will benefit individual states to local taxation. Maybe defense and regulating interstate commerce would be a good starting place for congressional powers. It really is a shame that the framers didn't think of this.

Damon,

Your comment's brilliant. You and I may be among the few people to get it, but it's still brilliant.

Patrick:

How is a situation where NY, VT, CT, etc "are booming and hardly need a welfare state" a "race to the bottom" scenario? Isn't this just healthy competition between different ways of structuring government? Doesn't this allow states to experiment, and permit states to imitate the sucesses and avoid the failures?

MA, in your hypothetical, has a strong interest to abandon utopian notions and do what its neighbors do, in order to encourage economic growth. A national welfare state, on the other hand, makes innovation and experiment much much harder.

Unless you think both 1) that government welfare is the only possible form of charity, and 2) economic growth isn't an excellent form of "welfare," in that it lifts people out of poverty, I can't find any reason to object to the state (rather than national) structuring of welfare.

Hopefullly the next time someone writes a constitution, they will lay out a set of specific powers that congress has that will be for the good of the nation and leave the activities that will benefit individual states to local taxation. Maybe defense and regulating interstate commerce would be a good starting place for congressional powers. It really is a shame that the framers didn't think of this.

Damon, considering there were no republics at all at the time (oh wait, does Iceland count?), let alone federal republics, I think the framers did pretty well. Part of the design of the US involves competition between the states, but in 1787 it really wasn't clear in which areas such competition would work. Note, for example, that slavery ended up being an area competition did not work in. Or consider the current argument on gay marriages.

The worker in a low-population-density area most likely has a longer commute to work than the worker in an urban area. Most likely he drives, so, buys more gasoline, and pays more federal gasoline tax. This tax funds both highway maintenance and construction, AND various "mass-transit" systems for the urban areas. Is it fair to say that the driving commuter is subsidizing the bus-riding, subway-using, light-rail-preferring urban worker?

Pouncer, that's easy to fix. Back in the late 1970s, Senator Dale Bumpers (D-Arkansas) proposed we set up a Federal gasoline rationing system that would allow everyone to buy a certain amount of gasoline (using coupons) at a fixed price, whether they had a car or not. See, this would allow every American to have a share in the country's energy resources... even if those energy resources had to be imported from the Middle East. And since you could trade, buy, and sell coupons, poor people without cars would make money, and all those rich people that commute long distances would have to pay... oh wait, maybe that would have made things worse... but at least there would have been lots of jobs available at the Federal Gasoine Rationing Administration. And the form you had to fill out to get gas probably wouldn't have been too onerous... (I'm sure it won't surprise most of you to learn that this plan was endorsed by Teddy Kennedy in his 1980 Presidential run.)

PJ

Damon was being sarcastic.

Wisconsin has "several major industrial cities"??!! Which ones would those be?

To Patrick Fitzsimmons:
What you call a "bug", I call a "feature". For extra credit, look up "subsidiarity"...

Rob - The only 'incentive' a state has to maintain their utopian vision is pure altruism. A race to the bottom is not 'healthy competition' between competing state governments. Governments are not businesses, seeking to maximize revenues and minimize expenses. They seek to do the maximum amount of 'good' for their citizens.

More enlightened states see that provide a social safety net, subsidized by income taxes, is the best way to achieve a more optimal society. Unfortunately, in a system where each state decides it's own welfare spending and tax rates, altruistic municipalities are forced to limit their transfer payments in order to keep upper income earners from fleeing to the less progressive state.

I get a kick out of seeing the Right try to twist this issue around and rejoice in the irony of the 'blue' states getting what they deserve for supporting a progressive tax system, when the true irony is found in the hypocritical ranting of some red-staters, who have minimal state tax burdens because of the huge amounts of welfare they're getting from the blue states. Newt Gingrich springs to mind, a quote of his from 1994 or so went something like (while referring to big northern cities) "They have developed a culture of waste, and want us to write a check for it", when his district had the third most favorable +/- ratio in regard to federal taxes paid vs. federal spending received.

But wallster, this argument only works on the a priori assumption that welfare programmes are preferable to growth, and that state citizens have absolutely no interest in a good business environment. It also operates on the incorrect assumption that corporate taxes, rather than personal taxes, are the main funder of social spending. In the high tax states you cite, it is personal taxation that provides the majority of the funding.

States have to make tradeoffs between competing desires such as growth and social programmes. It is generally accepted that such tradeoffs are better made locally than nationally, as local politicians better reflect the needs of the individuals they represent. I see no compelling reason to enforce a federal bureaucracy so that Massachussetts can force New Hampshire to pay for things that only Massachussetts wants, any more than I think that New Hampshire should be able to prevent Massachussetts to zone day care centers instead of industrial parks so that businesses will be less tempted to move there.

"Pure altruism", hey? That would explain why so many upper-income people in our scenario flee Taxachusetts despite all the "good" that its government does-- they realize that it would be selfish of them to go on taking up space in enlightened Taxachusetts while there are still people stuck in benighted Cow Hampshire who haven't had the chance to experience all that good for themselves. So they flee to make more room.

>Pouncer, that's easy to fix. Back in the late
>1970s, Senator Dale Bumpers (D-Arkansas) >proposed we set up a Federal gasoline rationing
>system that would allow everyone to buy a
>certain amount of gasoline (using coupons) at
>a fixed price, whether they had a car or not.
> ... since you could trade, buy, and sell >coupons, poor people without cars would make >money, and all those rich people that commute >long distances would have to pay

This in the same environment that R-ILL and presidential candidate John Anderson proposed a fifty-cents-per-gallon gasoline tax, the proceeds of which would bail out Social Security?

It's not _that_ outre' . Molly Ivins -- who understands oil, being from Texas and all -- makes one of her most cogent cases for taxes in general when addressing gasoline taxes. Because (she claims) gasoline demand is fairly inelastic, an increase in gas prices at the pump either (a) fattens the profits of oil producers -- who are either Saudi sheiks, Russian kleptocrats, or sleazy Texans like J.R. Ewing on television but in any case rich bastards who morally should NOT be enriched -- or (b) goes towards taxes and general federal revenues which are then redistributed to peanut farmers, welfare moms, and those who flunk out of college and default on their loans but in any case are morally elevated via being impoverished. MEANWHILE, the higher price of gas inspires people to avoid polluting SUVs, to relocated into higher-density metropolitan areas and sparing the countryside the demon "sprawl", and drives R&D and development of new technology -- newness having virtues of progressiveness, novelty, and disempowerment of the current establishment regardless of the absolute utility or virtue of the new technology versus the old.

I find that line of reasoning almost compelling.

"Unless you think both 1) that government welfare is the only possible form of charity, and 2) economic growth isn't an excellent form of "welfare," in that it lifts people out of poverty,"

Excellent points. About the first, there is interesting data (which I'll have to go find) demonstrating an inverse relationship between per capita private charity giving and per capita welfare payments. Of course, one may still argue the relative merits of private vs. public charity, but it's important to remember that just comparing public welfare figures is not always fair.

Jane - I realize that personal taxation provides the majority of funding. And people can flee high taxes even more easily than corporations can. I don't see how one could interpret my post to say that corporate taxes would comprise the majority of taxes lost to low-tax municipalities.

Paul - Not everybody in high-tax states is altruistic. When a state decides to be progressive, they risk losing those who are less progressive to lower-tax states. Your example of people leaving Taxachusetts for Cow Hampshire proves the point Patrick is trying to make - welfare must be funded at the federal level.

wallsters' definition of altruistic seems to be 'taking money from other people to spend the way we want'. If the state as a whole wants to provide a good safety net, it could do so with a substantial flat tax; this would avoid chasing away high earners. If a majority of voters doesn't support the safety net enough to be willing to increase their own taxes, then maybe 'altruistic' isn't the best term to describe them.

Rob - I think I made a mistake when I called this a race to the bottom situation. It's really more of a prisoners dilemna.

If both New York and Massachusetts do not have a welfare state, both face pervasive poverty. This is not the best solution. For those who believe poverty can be eliminated without some kind of government safety net, I challenge you to name a place where this has happened. If Massachusetts has a welfare system but New York does not, all the wealthy people and businesses move to New York. Massachusetts loses big and New York wins. Vice versa if New York has a welfare state. If both of them have a welfare state though, we get the best situation because poverty is reduced yet businesses will not move from one state to the other. And from everything I've read, a moderate size welfare state does not have a huge impact on economic growth. Thus this is the optimal solution, strong growth for both states plus a welfare state. However, it requires the federal government to create the welfare state, because neither Massachusetts or New York will do it themselves.

Jane - when you say that a lot of the social spending is supported by residents and not businesses you are probably correct. That is why it is not suicide for Massachusetts to have a strong welfare state with tax free New Hampshire next door. Wealthy residents are willing to stay because they like living in a state that supports the poor. But right now a lot of social spending does come from the federal government so the disparity between Massachusetts taxes and New Hampshire taxes is not that large. But if the states had to bear the full burden of social spending, I would predict that the overall amount of welfare spending would significantly decrease. And as we already have millions without health insurance and without stable homes, this would be a bad thing.

I realize that not everyone is altruistic-- but it doesn't make much sense to describe welfare-state policies as "altruistic" unless a goodly number of their supporters are themselves altruistic. And unless I'm mistaken about the meaning of the adjective, the only logical candidates for it are those who are putting up the money. A minor quibble, perhaps, since the argument that the welfare state has to be done nationally or not at all actually works better if people aren't altruistic.

Jane, all sorts of programs would be an incredible headache at the state level whenever someone moves between 'em. Even privitazed social security.

> Jane, all sorts of programs would be an incredible headache at the state level whenever someone moves between 'em. Even privitazed social security.

In what state is moving a retirement account from one company to another worse than dealing with the DMV?

"If Massachusetts has a welfare system but New York does not, all the wealthy people and businesses move to New York."

Like most predictions containing the word "all," this is untrue. Some states already have lower taxes than others, and this has not happened. Nor have all Canadian businesses moved to the US. Nor have all businesses moved to tax havens.

Mr. Fitzsimmons:
Extrapolating your argument:

If Europe has a welfare system but the U.S. does not, all the wealthy people and businesses move to the U.S. Europe loses big and the U.S. wins.

Could be a plan, eh...?

Patrick,

"If both New York and Massachusetts do not have a welfare state, both face pervasive poverty."

That's a really odd assertion on a number of levels. There's no reason to assume that "pervasive poverty" is the norm or that only government handouts can solve it. On the contrary, a booming economy which provides employment to many or most is far better at combatting poverty than unearned cash payments. Indeed, some economists and social scientists have suggested that welfare solidifies, rather than ends, poverty, by raking its recipients dependant and removing their incentive to work.

We've had national welfare since LBJ (Well, since FDR) and poor people are still poor. This isn't working out so well. I'd like to see some new ideas, but the only hope for that is at the state rather than the Federal level.

To be honest, however, I've known a fair number of poor people, and I've found that poverty is more an attitude than anything else--a tremendous number of possibilities are open even to high-school dropouts in a high-unemployment area like Seattle (which I just left), and the difference between the poor and the middle class seems to be the willingness to seize opportunities rather than any number of government programs.

Rob -

Alot fewer people are poor than they were before LBJ and FDR.

M. Scott Eiland wrote:

Though the images of how the more, ah, peace-oriented states would spend their military budgets are certainly good for a giggle or two.

Well then, let's authorize the more, uh, war-oriented states to mass their national guards for an invasion of the peace-oriented states. Methinks the latter would be more likely to discover a cachement of guns than send out sign-waving hippies ;)

Pouncer wrote:

MEANWHILE, the higher price of gas inspires people to avoid polluting SUVs, to relocated into higher-density metropolitan areas and sparing the countryside the demon "sprawl", and drives R&D and development of new technology

Sounds grand when written in so many words, but extrapolate the consequences. Dense urban centers tend to have higher crime rates, especially in poorer neighborhoods, and I can't see as how making more people move to the city is going to improve on that problem. Also, one way or another the country is still dependent on a very large amount of truck shipping. Gas price hikes hit that sector the hardest, meaning either you have to exclude them somehow from the tax, or expect them to pass that cost onto consumers. Ultimately the poor bear the greater burden of the gas tax hike, so one set of problems has been traded for another.

Large swaths of Europe thought the easy way to do that would be fuel type discriminations -- the unintended consequence was that car manufacturers quickly migrated to diesels, which reportedly leave a somewhat obnoxious stench around the major urban centers.

Wallster:

So what? LBJ promised to "eradicate poverty," and I'm still waiting to see it.

Besides, as you well know, "After X, therefore because of X" is a logical fallacy. It should surprise no one that fewer people are poor today than during an event known as "The Great Depression."

Yes, wallster, people also have more eminem CD's than they did in 1929, which tells us. . . nothing about the causes of the increase.

I like the handy Table.
A few things show up right off the bat. Of the top 5 recievers are Alaska and West Viginina. Hmm is that TED STEVENS and BOBBY (theclan) BIRD. The two biggest pork barrel spenders in Washington. North Dakota has Dorban i think his name is a right hand man to BB.
The other two both very powerful senators in Trent Lott and Pete Domenici, though republicans neither has ever been known as a fiscal conseravative when pork was on the table.
The other main thing is of the Top 20 recievers almost all are farm states. Of the top payers you have almost all with major metro areas with highers incomes.
I live in Chicago. I am all for ending farm subsidies completely. Privatising the Ponzi scheme we call SS. Which would create wealth for the poor. I also advocate repealing the income tax deduction from employees payroll checks. Has anyone here been self employed? Get all your money then pay quarterly tax payments. :) i would love the march on Socialism in Washington that would cause.

Bill

There are serious problems with these data. The total tax burden of a corporation based in a particular state is assumed to be borne by the citizens of that state. Thus the citizens of Michigan are assumed to pay all of GM's corporate income taxes. In fact, they are borne largely by its shareholders, who live everywhere. Similarly, in the spending side, the benefits of a government contract are assumed to go entirely to the citizens of the state where the corporation has its headquarters. Thus if Boeing gets a defense contract, all of the benefits go to the people of Washington. In fact, Boeing has facilities in other states and contracts out much of its work. For these and other reasons, these cost/benefit data are virtually worthless as far as telling us anything meaningful.

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