Here's a spiffy chart that tells us how much each state gets in federal spending for every dollar its citizens pay in federal taxes.

The federal tax burden falls much more heavily on some states than others, according to a new analysis of federal fiscal operations. Comparing the federal tax burden by state with an adjusted set of the Census Bureau’s most recent data (2000) on federal expenditures by state, Tax Foundation senior economist Scott Moody has ranked states in order of which got the best deal in 2000 from Uncle Sam’s tax and spending policies. ...

Factors influencing the shifting of federal dollars include the location of people who receive Social Security, Medicare and other substantial federal entitlements, the location of federal employees, federal procurement decisions, and grants to state and local governments.

"Federal employees" also includes military personel, which probably explains why New Mexico has the best ratio of any state, receiving $2.03 from the feds for every $1 its citizens pay in federal taxes. Connecticut -- the richest state in the Union, if I remember correctly -- has the worst ratio, receiving only $0.62 for every $1 sent to Washington, DC. The capital itself gets a whopping $6.49 in spending for every $1 paid, but that's not surprising considering that it's the center of government.

My own state of California was ranked 38th in 1990 and 40th in 2000, receiving only $0.89 and $0.86 per $1 in those years respectively. In 2000, Vermont was the median state, receiving $1.08 per $1 taxed; that the median is over $1:$1 indicates that more than half the states are getting more out of the system than they put in... a phenomenon strangely similar to how the income tax hits individuals. (HT: The House of David.)

Here's a table showing what percentage of income tax comes from various groups of earners, along with what percentage of total income is earned by that group (data gathered from the IRS via Rush's website, 2001).

Income Group% of Total Income Earned% of Total Income Tax PaidEarned:Paid Ratio
Top 1%17.53%33.89%1.93:1
Top 5%31.99%53.25%1.66:1
Top 10%43.11%64.89%1.51:1
Top 25%65.23%82.90%1.27:1
Top 50%86.19%96.03%1.12:1
Bottom 50%13.81%3.97%0.29:1

Of course, these numbers only reflect taxpayers; there are probably millions of low-earners who don't file taxes at all. How much do you have to earn to be in the top 50%? If you're filing jointly, you and your spouse need to earn a combined $26,000 or more to be in the upper half -- and have the privilege of subsidizing the lower half of the spectrum to the tune of approximately 4:1.



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