For some reason, New York is upset that it pays 30% more, per capita, in taxes than the average state. Well, I'm from New Jersey and we pay slightly more than New York. New York is upset that it gets back much less than it pays out. Again, I'm from New Jersey and we get even less back.
New York is a big state, and a relatively wealthy one. New Jersey is wealthier. I figure we have more to be upset about.
Long ago a Progressive neighbor had me over to meet a candidate for Congress she was endorsing. She threw a great shindig, good hors d'oeuvres, drinks, etc. Then the candidate spoke, and lamented over and over that we never get the same tax dollars back from Washington that we send down there.
I quickly raised my hand and asked "Isn't it impossible to get more back than we send? Assuming every region got back its fair share of taxes, after you remove operating costs of the federal government, you're left with only a portion of the money you sent down. For us to get even our fair share back, we're still out something."
You'd think I smacked her in the face with a fish. Which I guess I did, figuratively. Nobody likes 'that guy'. Except me, especially when it's me.
It's only logical that certain states are always going to be shortchanged by the federal government simply because that's how income redistribution works. But is it any surprise that the states which have the best return from the federal government are among the poorest states? New Mexico, Mississippi, Alabama, West Virginia. Only Virginia stands out as 'wealthy' among the top 5 and for one reason - DC denizens tend to make Virginia their home. Maryland, the other DC residency, is conspicuous at number 6 on 'return of tax dollar'.
When you're financially supporting people, you tend to work harder and be more productive. New Jersey must be one of the hardest working states in the Union. We work so hard, we never took the time to develop large cities. New York and Philadelphia tend to be our 'cities'. So much so, their professional teams are New Jersey's. The only professional team we have is the once-great New Jersey Devils. We had the New Jersey Nets for a while, but they decamped for Brooklyn. Our professional football teams, the Jets and Giants, want that big-city New York association - not New Jersey, even though they play here. We NJ denizens don't complain enough about issues like this, we're busy working to cover the costs of public spending.
As I ponder the possibility of a Universal Basic Income, which several politicians are actually taking seriously (I figure it's illiteracy in economics which leads them to support the UBI), I begin to visualize the 'return of tax dollar' as a permanent losing game - and one which will eventually cause wealthier states to become less wealthy. The assumption you can tax your way to wealth and progress is still a very real belief in Washington. A person can only work so hard, and eventually they tend to get pissed someone is benefiting from their hard work, while putting almost nothing back in - not having a skin in the game. Long ago, being a landowner was considered to be the best qualifier for being allowed to vote. As a student of democracy, I understand the limitations of that belief, though at times it seems logical.
There are politicians who claim that the wealthy among us are the reason others are poor. This wealth came at the expense of the poor, the firms which the wealthy built (improving everyones' lives) presumably make the lives of people worse and only improve the livelihoods of the owners.
The reality is these people are wealthy because whatever they produced improved the life of everyone who purchased the good or service. Wealthy people don't (usually) make other people worse off. They aren't typically wealthy because they are thieves in some way (admittedly, some are, but that's a rarity). They have managed to create a win-win exchange which people have engaged. Poor people, unfortunately, can make other people poorer when they begin to drain value from the system.
As you consider the amount of money you get back from your taxes, remember you'll never get it all back even in the best of circumstances. While I'm a big supporter of charity, I do not view government as a substitute for charitable giving. The more tax dollars that go, with limited consent or knowledge on its use and application, to 'improve the lives of others' the more it is probably wasted. Especially if it's going to Virginia or Maryland.
