Comparative Federal Tax Contribution by State

Originally Posted by saden1

Through enlightenment? Through a disaster that wipes out 99% of the human population? F*ck if I know man, but it would be nice....then again man is a selfish and greedy animal and Cain is programed to to kill Able no matter the situation.

Originally Posted by saden1

I believe in the progressive tax wholeheartedly. It's the best system to sustain a capitalistic nation around the globe. I do look forward to, however, the day where we are all on equal footing and therefore pay equally into the system.

Originally Posted by Schneed10

As I look through the work here, the biggest thing this tells me is the per capita income by state.

New York is the most effective taxpayer, even net of federal aid, because they have such a high number of citizens earning very high salaries. Wall Street, big corporate execs, investment bankers, consultants, employees of the accounting firms, media outlets, and on and on. These same citizens are the ones who generate a great deal of income and capital gains through their securities assets - this also generates tax for the federal government. It is these high earners that are contributing the lion's share of the tax money, as a great percentage of their income is taxed at the highest tax bracket, 35% or more.

New Jersey and Connecticut also rank high on the list for this reason. Many citizens from these areas commute into New York.

You'll note similar contributions amongst Massachussets (Boston, a large financial center), Illinois (Chicago). Then note poor states who are suffering most from economic troubles, Michigan's unemployment in the Detroit area pulls it down to one of the biggest drags.

Wage index also plays a huge role here. The states at the top of the list are high wage index states. An accountant coming out of college may start at 60K in NYC, and 40K in the south. Note the presence of South Carolina, Kentucky, Alabama, Mississippi, and Georgia near the bottom of the list. Cost of living in these areas is some of the lowest around, resulting in lower wages, resulting in lower taxes paid.

Florida is indeed an anomaly because of the retirees. They don't pay taxes on the social security checks they're drawing.

It is important that people not interpret this chart, particularly the drag index, as an indicator of one state doing more than another to fund the federal budget. It is not attributable to anything the state or the citizens are doing, it is merely reflective of:

- The geography of high paying jobs - where are the lion's share located? Major cities.
- The cost of living (and as a byproduct, wage index) of each state.

Unless you're a believer in a flat tax, one should expect New York to contribute more taxes on a per capita basis than any other state, simply because they make so much money. And it should be no surprise that California pays more than most states in taxes. They have way more people than most states and plenty of urban centers with high paying jobs, not to mention a booming tourism industry.

Saden, a very valuable analysis would be to add mean household income by state to the report, and then calculate (Gross Tax Paid - Federal Aid Received) / (Population x Mean Household Income). This would show you the percent of income paid to the federal government, net of aid. I'd postulate that you'll see a much more even distribution amongst the states.

Originally Posted by Schneed10

As I look through the work here, the biggest thing this tells me is the per capita income by state.

New York is the most effective taxpayer, even net of federal aid, because they have such a high number of citizens earning very high salaries. Wall Street, big corporate execs, investment bankers, consultants, employees of the accounting firms, media outlets, and on and on. These same citizens are the ones who generate a great deal of income and capital gains through their securities assets - this also generates tax for the federal government. It is these high earners that are contributing the lion's share of the tax money, as a great percentage of their income is taxed at the highest tax bracket, 35% or more.

New Jersey and Connecticut also rank high on the list for this reason. Many citizens from these areas commute into New York.

You'll note similar contributions amongst Massachussets (Boston, a large financial center), Illinois (Chicago). Then note poor states who are suffering most from economic troubles, Michigan's unemployment in the Detroit area pulls it down to one of the biggest drags.

Wage index also plays a huge role here. The states at the top of the list are high wage index states. An accountant coming out of college may start at 60K in NYC, and 40K in the south. Note the presence of South Carolina, Kentucky, Alabama, Mississippi, and Georgia near the bottom of the list. Cost of living in these areas is some of the lowest around, resulting in lower wages, resulting in lower taxes paid.

Florida is indeed an anomaly because of the retirees. They don't pay taxes on the social security checks they're drawing.

It is important that people not interpret this chart, particularly the drag index, as an indicator of one state doing more than another to fund the federal budget. It is not attributable to anything the state or the citizens are doing, it is merely reflective of:

- The geography of high paying jobs - where are the lion's share located? Major cities.
- The cost of living (and as a byproduct, wage index) of each state.

Unless you're a believer in a flat tax, one should expect New York to contribute more taxes on a per capita basis than any other state, simply because they make so much money. And it should be no surprise that California pays more than most states in taxes. They have way more people than most states and plenty of urban centers with high paying jobs, not to mention a booming tourism industry.

Saden, a very valuable analysis would be to add mean household income by state to the report, and then calculate (Gross Tax Paid - Federal Aid Received) / (Population x Mean Household Income). This would show you the percent of income paid to the federal government, net of aid. I'd postulate that you'll see a much more even distribution amongst the states.

Originally Posted by CRedskinsRule

What if the congress had just taken the approx. 800Billion, and given every person over 16 (approx 240 million in 2008) 3333 dollars, not tax cuts, not spending programs, just a flat 3333 dollars. That would have been interesting. Some it would have been a windfall, some would have repaid loans, some would have invested, and still others would not have noticed that amount. but it all would surely have been a stimulus.

Originally Posted by firstdown

That would have been way too easy but then there would be no strings attached to the money and would not make any voters dependent on goverment programs (vote buying).

Originally Posted by saden1

Median data is available from the census and is preferred due to the fact that it's not sensitive to extremes like mean. Also, I don't understand the formula you gave. Can you clarify?

Originally Posted by CRedskinsRule

What if the congress had just taken the approx. 800Billion, and given every person over 16 (approx 240 million in 2008) 3333 dollars, not tax cuts, not spending programs, just a flat 3333 dollars. That would have been interesting. Some it would have been a windfall, some would have repaid loans, some would have invested, and still others would not have noticed that amount. but it all would surely have been a stimulus.

Originally Posted by Schneed10

From an economic standpoint, the democratic argument is that too many people would save it. Which doesn't help give the immediate shot in the arm for creating jobs. To an extent they're right.

Consumer confidence is really low right now, which is always an indicator that people are afraid to spend money. They instead save it.

But eventually that money would trickle back into the economy and give us the economic boost. Some argue that doing it your way would be more efficient in the long run, and I think they're probably right. But it wouldn't get the immediate results democrats are looking for.

Originally Posted by firstdown

Well I'm not sure what part of the stimulas bill will hit the economey very fast with the bill passed. Heck 40% of it will not be spent until 3 years from now and another large portion does not really do much more then grow goverment. The actual building of schools, roads, etc.. is like only 10% of the entire bill but if your on welfair now don't worry more money is heading your way.

Originally Posted by Schneed10

Well a significant portion of the bill comes in the form of tax credits. We'll see those when we file our tax returns next winter.

Also, what people fail to understand is that if you give people on welfare more money, they WILL spend it and spend it immediately. Forget whether you think that's fair or not, that's not the point, the point is the money gets spent, businesses do better as a result, and more jobs get created.