The discussion over Scotland’s possible secession has often touched on the issue of regional net tax payments as a decisive issue in secession decisions. That is, if a region is a net tax-receiving region, then there is little incentive to secede, whereas, a net tax-payer region has significant incentive to secede. In the case of Venetian secession, for example, it has clearly been an issue for many decades as northern Italy (including Veneto) is well aware of its status as a the wealthier region of Italy that subsidizes the poorer south.
This also appears to be the case with Catalonia, where the region generally pays more in tax revenues than it receives.
Not all regions are aware of where they fit into the net tax-receiver puzzle however, and there’s a big blind spot on this in the United States. Many have assumed that those areas of the country most associated with supporting government welfare programs, such as the northeast, must be net tax receiver areas. The reality, however, is that the northeast is a net taxpayer region, as are other areas of the country most associated with being “pro-welfare” such as the west coast and Illinois.
On the other hand, the region of the country most associated with being for “free markets” is the American south (not including Texas) which is generally far more of a net tax receiver region than anywhere else in the country. This runs contrary to many political narratives which insist that the so-called blue states are living off the sweat of the red states. The fact remains though, that it’s the left-liberal regions of the country that are paying in the most in taxes, and much of that revenue moves south.
Many left-wing bloggers are quite fond of pointing this out, as in this graphic here:
The blogger is trying to make a political point by including the political party affiliation of each state’s US senators, although that’s of pretty dubious value. The tax numbers appear to check out pretty well, though, and this map is just one example of many that can be found online.
The breakdown here should not be surprising at all, however. The subsidized states on the map, such as Mississippi, Alabama, South Carolina, and others, all tend to have lower income residents, which means lower income-tax rates. Thanks to a progressive income tax, rich people really do pay more income tax, even after taking advantage of all those rich-guy tax shelters. Also, states with older populations, such as Arizona and West Virginia, will certainly have more people on welfare, or as the recipients of such funds like to call it: “Social Security and Medicare.” But also having a proportionally-large number of low-income people in general will mean more Medicaid money coming in, plus regular old TANF-type payments.
6:09 pm on October 9, 2014
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