Brevity has never been my strong suit. So if you want to know what the below post is about, but do not want to read a couple thousand words, it’s this:
The famous donor/beneficiary map, which purports to show that residents of red states are the beneficiaries of government largess, is a gross oversimplification. It acts as though government were a matter of taking checks from one state and then giving it to another. It overlooks that much of the “extra” spending in (for instance) rural western states is on the wide assortment of properties that the federal government owns, on Indian Reservations, and so on. These things are not spent for the benefit of all of the residents of their state, but rather for a select few, sometimes for services rendered (such as the military), and on things that are aimed to benefit not just residents of that specific state but of the nation as a whole (such as national parks and Interstates).
Will, in other posts I’ve shown this map of the west and how as you’ve noted in your OP it is largely owned by the fed. Therefore (and I’m not bothering to tell the morons on the site you linked) it is only fair that the fed “reimburse” the west for the lost revenues.
More interesting and from the same general site is this map wherein states are renamed to their GDP counterparts.
damn 2nd map didn’t make it, trying again now GDP map
As luck would have it, I link to the same map (the first one) in the longform post. It also includes this tidbit: The PILTs (Payments in lieu of taxes) the government pays on the 42% of Wyoming that it owns is 2% of the revenue generated by the 58% it doesn’t own. I didn’t include the numbers for Idaho because they were so similar: the federal government pays 2% on its half compared to what Idahoan residents and businesses pay on the other half. There’s an argument to be made that Idaho and Wyoming are not due the money since they are not responsible for upkeep, but they are nonetheless “penalized” (as far as the map goes) by what the federal government does spend on upkeep, not to mention the roads that go through the lands that they cannot expect to raise but a pittance of revenue from. So no matter how you look at it, the federal government takes half of it and then attributes both the PILTs they pay *and* the upkeep as expenditures to that state. To be interpreted by some as freebies and welfare.
Besides the things you mention on the spending side (e.g. federal land ownership, the military), the progressive income tax contributes to the map on the revenue side. More urbanization correlates both with more Blue-ishness and with higher mean incomes. With even ‘flat’ taxation, higher incomes mean higher govt revenue per capita; progressive taxation of course amplifies this.
You are correct about the income side. It’s mentioned in the longform post. Essentially, Idaho is a beneficiary state in good part because it is poor.
So why nevada? Nevada’s a rural state with a small population. More than 80% of the land is owned by the federal government. It’s got major interstates. Major mineral wealth. Etc. But unlike wyoming, it’s a blue state on that “who pays” map.
Looking further at those maps and lists: Of the 10 states with the largest percentage of federally-owned land, four are blue states. Of the 10 states with the smallest percentage of federally-owned land, fully seven are red states. This makes me less inclined to accept the idea that the breakdown is just about the federal government paying its own bills.
I think Kolohe hits upon the real reason: States with higher incomes have higher revenue per capita. Progressive taxation at work.
For the most part, it doesn’t offend me that those red, rural states get more money (Of course, sometimes the reasons they’re getting more money ARE unfair. It bothers me immensely that corn gets massive subsidies, but the fruits and vegetables we grow in California get little or nothing)*.
See, I’m a liberal. I believe in progressive taxation, and in the government lending a hand to those that need it most. It just bothers me when the folks in all those red states complain about how San Francisco liberals are a bunch of parasites who are stealing all their money and blah blah blah.
*And so’s we’re clear, I’m advocating that Iowa gets less for corn, not that we get more for strawberries.
A few things:
1. When we talk about a state getting money, we simply cannot talk about it as though the government is writing a check to every resident. Or that it should be looked at as welfare rather than the expenses incurred with running a military base. Taxation works that way. Spending simply does not. But the map treats it like it does. People who smugly point at the map treat it like it does. That’s my main objection.
2. Wyoming actually generates more tax revenue (per capita) than Nevada does. The difference? Two things: (1) Wyoming has natural gas on public lands. Nevada doesn’t. That distorts the “government spending” figure (see the longform post for details). Take out the grants associated with Mineral Leasing, and Wyoming becomes a donor state and Nevada becomes a borderline. (2) The government doesn’t actually spend much money in Nevada. The PILTs they pay on Nevada are less on the 85% of Nevada than the 42% or Wyoming. There’s not much in the way of Indian Reservations. And, of course, they don’t have the Minerals for the Mineral Leasing revenue.
3. There is no “the” reason. Land *is* an issue. So is state income (mentioned in the longform version for Idaho). New Mexico and Arizona get hit pretty heavily due to the reservations. Each state is different and has a different reason for being where they are on this list. It’s not about any one thing. Which brings us back to the fact that the map is a gross oversimplification. A way to treat the red states as being indebted.
except in Alaska, where they really do write checks to people.
Also: I see the map used a lot more offensively than defensively. Whenever I hear “I’m tired of our money going to…” I can’t recall it ever ending with “California.” It’s almost always “Washington.” This is really something I hear liberals say conservatives say a lot more than I hear conservatives say it.
The closest it comes is the false implication that their money is going to urban welfare programs or that liberals in California are the reason why taxes are so high. The first part of that is wrong, though the map doesn’t further the cause because the money from the map isn’t direct payments or even salaries and wages, but but rather how almost all of the federal money is spent. The second part of that is not necessarily wrong. The map can perhaps be helpful there to demonstrate that the money is getting spread around to different parts of the country. But it is likely to be uncompelling to a resident of Montana who figure a whole lot of that money is going to the reservations anyway.
Btw, here’s imo a better map (though a bit dated), as it shows the gradient better than the OP’s link to the binary map.
FYI page nine of this:http://www.census.gov/prod/2010pubs/fas-09.pdf shows per capita federal aid to state and local governments.
I actually had that report open as I was writing the longform post. The long and short of it is that Wyoming is #2 because the “aid” they get is from the Minerals Leasing Act. Namely, some of the money from the natural gas they’re pumping out gets to stay in Wyoming. you’ll notice that the vast majority of Wyoming’s “aid” is “Other” compared to other states. It’s from the Department of the Interior, which handles MLA and PILTs, both of which are classified as “aid” but are actually payments for generating mineral revenue or lost state revenue due to the land that the federal government owns and does not pay taxes on.
What you are saying is that collections are smoothly distributed accross the whole country (plus the effect of progressivetaxation), while expenditures are lumpy because the federal government does a lot more that distribute welfare, and this lot more, be it nuclear silos, centers for controling diseases or for hurricane tracking, military bases, etc., is money going out in discrete lumps.
So far so good. You are right, as anyone that thinks about the problem will understand in 30 seconds.
The problem is that in the mind of the “federal taxation is thievery” crowd there are no other uses of federal money other than welfare to undeserving recipients. Once you forget all that the federal government does (do we really want 50 hurricane tracking entities, one per state?), the conversation is not going anywhere.
I am not of the mind that federal taxation is thievery and I think you can argue against that, and against the notion that all federal money is welfare, without making this a good state vs bad state issue*. It may well be true there are people that believe that federal taxation is theft or federal money is welfare, but the overlap between these people and people who live in some of these beneficiary states is inexact, to say the least.
Especially when it comes to those who actually live in and around the most benefitted areas. The most blue collar places I’ve ever seen in Idaho and Montana (Pocatello and Butte) actually lean Democratic. So do counties with reservations. And wealthy counties living in and around national parks.
* – Much of the time, it’s not unlike Alan Scott above where the good state versus bad state is not defined by credits and debits. But the dynamic is still there because you have the Generous Wealthy States versus the Ungrateful Debtor States.
Especially since a lot of the people you would be arguing against believe that public lands should be sold, national parks privatized, and so on. To win over the people in the middle
In fact, the majority of federal spending does go to stuff that benefits specific individuals directly, like Social Security, Medicare, and Medicaid. True public goods are about 40% of the federal budget, most of that being military.
A premise of the issue examined in the OP (the long-form one) is that certain kinds of spending are aimed at the national interest and not merely in the local interest. This deserves some reflection because it seems to me that federal spending is simultaneously of both local and national benefit.
We need those planes with which to equip our air force and we all benefit from having a strong miltiary; by their nature, the airplanes have to be built somewhere particular and that area will feel a particular local economic stimulus not felt elsewhere. We like national parks and national forests; they have to be where the land is by their very nature and frankly not all land is as exceptional or worthy of that sort of preservation as other places, and the communities around this particular land get an enhanced benefit even while we all benefit from the preservation of this natural patrimony. We provide social welfare for our national benefit; it can only be dispensed locally to individuals.
In a lot of cases it can be difficult to break down whether a particular activity is of predominantly local or national benefit because we’re always going to be comparing an intangible sort of national good to a more tangible local economic stimulus. Does a local community benefit from the employment created by a federal prison more than the nation as a whole benefits from the ability of the federal government to enforce its criminal laws?
This is why I question the utility of examining net inflows and outflows of federal spending.
This deserves some reflection because it seems to me that federal spending is simultaneously of both local and national benefit.
Quite so.
So ultimately, what we have is a combination of things that benefit the local and sometimes benefit the national, but in other cases may not benefit so much as the federal government is merely the fiscal intermediary or is compensating state and local governments for revenue it might have gotten but for the federal government. And we have things that benefit primarily selected locals and everyone else only insofar as it makes them feel better and perhaps prevents peasant results, the unpleasantness of dying crops, or whatever.
And all of this is treated as black or white, however local or national the benefit, it’s all charged at the state level.
One of the lawyers at my firm reads the blog, and he told me today that the long-form post was perhaps his very favorite blog posts in any forum anywhere ever. I have to concur with him; taking memes apart to find the substance, or lack thereof in this case, is one of things that LOOG is really good at. Props, Will Truman!
Sweet! Not only that he liked it, but that someone (other than you, my coblogger) actually read through the whole thing!
Seems to me that the point of this isn’t so much that the leftists think that the government should stop transferring money to Republican-leaning states; it’s that they would like for people in those states to shut up, learn their places, and stop disagreeing.
I think that’s quite right. If I haven’t said something about how this is about “knowing your place,” I have been thinking it the entire time.
actually, I just want them to pay their fair share. WV deserves my money, SC don’t.