Saturday, November 06, 2004

Red States Feed at Federal Trough, Blue States Supply the Feed

The TaxProf Blog points us to a report from the Tax Foundation.

This fascinating study shows exactly which states benefit from federal tax and spending policies, and which states foot the bill.

Bushstates300

Surprisingly, the "value conscious" Red States -- you know, the folks preaching independence and self reliance -- are the biggest hogs at the federal trough.

Sayeth the TaxProf:

"The report shows that of the 32 states (and the District of Columbia) that are "winners" -- receiving more in federal spending than they pay in federal taxes -- 76% are Red States that voted for George Bush in 2000. Indeed, 17 of the 20 (85%) states receiving the most federal spending per dollar of federal taxes paid are Red States. Here are the Top 10 states that feed at the federal trough (with Red States highlighted in bold):

States Receiving Most in Federal Spending Per Dollar of Federal Taxes Paid:
1. D.C. ($6.17)
2. North Dakota ($2.03)
3. New Mexico ($1.89) (flipped Red in 2004)
4. Mississippi ($1.84)
5. Alaska ($1.82)
6. West Virginia ($1.74)
7. Montana ($1.64)
8. Alabama ($1.61)
9. South Dakota ($1.59)
10. Arkansas ($1.53)

In contrast, of the 16 states that are "losers" -- receiving less in federal spending than they pay in federal taxes -- 69% are Blue States that voted for Al Gore in 2000. Indeed, 11 of the 14 (79%) of the states receiving the least federal spending per dollar of federal taxes paid are Blue States. Here are the Top 10 states that supply feed for the federal trough (with Blue States highlighted in bold):

States Receiving Least in Federal Spending Per Dollar of Federal Taxes Paid:
1. New Jersey ($0.62)
2. Connecticut ($0.64)
3. New Hampshire ($0.68) (flipped Blue in 2004)
4. Nevada ($0.73)
5. Illinois ($0.77)
6. Minnesota ($0.77)
7. Colorado ($0.79)
8. Massachusetts ($0.79)
9. California ($0.81)
10. New York ($0.81)

Note that Florida, which had previously received exactly $1.00 in federal spending for each $1.00 in federal taxes paid, has since seen a windfall; Federal largesse was dramatically boosted in the post-Hurricaine, pre-election."

Posted at 10:43 AM in Finance, Politics | Permalink

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The TaxProf Blog points us to a report from the Tax Foundation. This fascinating study shows exactly which states benefit from federal tax and spending policies, and which states foot the bill. Surprisingly, the "value conscious" Red States -- you... [Read More]

Tracked on Nov 6, 2004 10:58:52 AM

» essays & effluvia: Red States Feed at Federal Trough, Blue States Supply the Feed from GrabTheMic

essays & effluvia: Red States Feed at Federal Trough, Blue States Supply the Feed:

Surprisingly, the “value conscious” Red States -- you know, [Read More]

Tracked on Nov 7, 2004 8:48:13 AM

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Barry Ritholtz has gone map crazy !!!!! He's posted a bunch of maps that relate to the election results. He's... [Read More]

Tracked on Nov 10, 2004 2:17:39 PM

» Blue States' Bad Drivers from Citizen Journal Blog
As the red state/blue state chasm widens, representatives of both sides have been busy pointing fingers across the divide, anxious to show which set of states is: friendlier, more moral; stocking or feeding from the government trough' more charitable, ... [Read More]

Tracked on Jun 30, 2005 9:16:02 AM

Comments

Bush ran an extremely negative campaign, quite rightly so, as his record, other than cutting taxes was not good enough to run on. The Gay marriage issue was irrelevant, yet, many Red staters based their vote on "values" or "morals".

Yale educated, but down and dirty oil business savvy; a hard drinking, educated good ole boy who saw the light and feels at home in Wabash or Washington
Yep, so good at the oil business that his only foray into it was a disaster. Business savvy? check the history books pal, Bush never oversaw one business that was successful, with the exception of the Texas baseball team, he got Texas Taxpayers to buy a new stadium for. He never took risks with his own money, he did it with someone else's money. When the business failed, his father, or his fathers cronies bailed him out.
One good answer that I believe Kerry could have used, was during the second debate, Bush asked Kerry how he was going to pay for all the programs that he wanted to institute. Kerry should have responded with "just like you mr. president, I'll write a check".
Bush's overall record was untenable, thus the attack ads. Kerry, if you'll go back thru, ran on his record, and only voiced displeasure with Bush's record. He had no 527's that did the nasty things that the SBFT did. Telling lies, and distorting the record of John Kerry was exactly what the Bush Campaign did. It will work as long as people do not want to take the time to do the research.
I'm an independant, and a moderate. I find our current administration has gone far right. involving the gov't into things like Gay marriage, Abortion, and other divisive social issues are repugnant. I'm wondering just how far they are willing to take this "mandate" from the people. Incredibly, it seems we are no longer progressing, but regressing.
I mean, think about it, right now, we have a president, that is so weak on geography as to make most 7th graders cringe.

Posted by: Tim | Nov 11, 2004 8:13:31 AM

Aren't democrats the ones who vote for all this federal spending and taxation? Why is it suddenly demonized because we're now back to red vs. blue state mentality? Complaining about the welfare state is a very Republican thing to do.

Democrats are having an identity crisis.

Posted by: Heather | Nov 11, 2004 10:58:23 AM

Charles Foster Kane wrote:

"The Republicans, in the last 40 years, have held the Presidency for 24 of those years, and Clinton managed to balance the budget so exactly who was overspending?"

Well, not to be too blunt, but you dems were! Don't you remember the unbelievable rhetoric being thrown out by the left (example: your medicare will be cut; seniors will be living in the streets!) when the balanced budget amendment was passed as part of Newt Gingrich's contract with america? Do you remember the seemingly annual government shutdowns that Clinton drove us into, because he steadfastly refused to balance the budget and was dragged, kicking and screaming, into it by Kasich? Where were you when that was going on?

"And which failed social program would you like to talk about?"

Idunno - let's start with the grand daddy, SSI. 390B last year alone, due to cross into insolvency in 2015 at its current spend rate.

Cal D wrote:

"Name 40 (20 for Arnold and 20 for Ron)"

Chortle - is that all you got? Why did you bother to post?

Oh - and I'd *love* to see a reference for those stats you threw out about murder rates, etc in your next post.

Linda Ronstadt, Don Henley, Michael Moore, Bruce Springsteen, John Mellencamp, Carole King, Matt Damon, Leonardo DiCaprio, Cameron Diaz, the Dixie Chicks(3), Barbara Streisand, Whoopi Goldberg, Rosie O'Donnell, Ed Koch, Ben Affleck, Caroline Kennedy, Ron Howard, Goldie Hawn, Lauren Bacall, Robert DeNiro, Kevin Bacon, Michael Douglas, Diane Von Furstenburg and Barry Diller, Steven King, Harvey Weinstein, Steven Bing, Charlize Theron, Uma Thurman, Stone Gossard, Chevy Chase, James Taylor, Hilary Swank, Brad Pitt, Jennifer Aniston, Sheryl Crowe, Kirsten Dunst, Jon Bon Jovi, P. Diddy, Paris Hilton

reference: Google it - they're all there.

Jason wrote:

"Hey, Mike, were you even paying attention during this campaign?"

Yes, I was. *Every* time Kerry was asked a question by the media, he would do 2 things: 1) claim to have a plan, then dodge the question. 2) take yet another swipe at Bush, claiming "we can do better". That was the entire content of his campaign - "I have a plan.. (usually followed by empty or unrealistic rhetoric)" and "President Bush has {lied, manipulated, distorted, messed up} .."

You guys go ahead and blame the electorate, don't take time to look inward. Charles Foster Kane's post is a perfect example of a liberal swipe - bandying about phrases like "simple minded", etc. You'll *never* win a convert with that kind of arrogant tone.

mike

Posted by: mike | Nov 11, 2004 11:20:43 AM


Heather wrote:

"Democrats are having an identity crisis."

It's not an identity crisis. Democrats are angry because they are no longer steering the ship. I, too, find it hilarious that dems are complaining about redistribution of income. I agree and think we need to end all subsidies, right after we end all the dems' vote-buying redistribution schemes and associated taxes.

mike

Posted by: mike | Nov 11, 2004 11:51:15 AM

A more interesting analysis would be a determination of how much it costs for the U.S. to take the money and return it to the states.

In other words, how much of the TOTAL money stolen is returned.

Criminals call it "skimming."

Posted by: Jack Woodhead | Nov 11, 2004 12:09:43 PM

More federal dollars currently go into corporate welfare programs than have EVER been put in all of the social welfare programs combined. So which party is buying votes?

Posted by: kev | Nov 11, 2004 3:12:57 PM

"More federal dollars currently go into corporate welfare programs than have EVER been put in all of the social welfare programs combined. So which party is buying votes?"


I challenge you to support that assertion with some real facts.

mike

Posted by: mike | Nov 11, 2004 3:47:22 PM

When churches help the needy it is called moral, loving, good, kind and the Godly thing to do. When government OF, BY and FOR the people help the needy it is called communism, socialism and Marxism. And ironically the name callers are often Christian Republicans.

The difference is Churches coerce the money through guilt, fear of hell or the rewards of heaven. Whereas the government acts according to the people's good will (via elected representatives).


Posted by: Larry | Nov 11, 2004 5:22:40 PM


Well, Larry, there's a difference.

I'm a nonbeliever and don't go to church. Nobody's coercing anything out of me with the threat of hell or the promise of heaven. Whether or not I give to any charity should be my choice, in any case.

Your preferred system takes money involuntarily, under threat of imprisonment and transfers it to people who in many cases do not deserve it. Add to that the problem of "good will"; once enough lazy people figure out that they can extract money from others via the government, the whole mess collapses.

mike

Posted by: mike | Nov 11, 2004 6:18:52 PM

mike said "I challenge you to support that assertion with some real facts."
-------------------------------------------------
According to Cato Institute (no bastion of liberalism) $75 billion a year is spent in corporate welfare. I'd say $75,000,000,000 could buy a hell of a lot votes.

Posted by: Larry | Nov 11, 2004 6:29:09 PM

Mike,
We share common ground. I too am a non-believer. I salute you on that --to reach that point you must have done your share of critical thinking.

I realize (and maybe you have too) that politics is an art form with VERY little scientific basis. You and I can spin the issues as artfully as our words will let us. Nice meeting you, I look forward to more discussion.

Posted by: Larry | Nov 11, 2004 6:40:36 PM

Mike,
Here is why I am a Democrat.

My mother, who is a retired 77 year old secretary worked hard all her working life. During her first marriage she was making $50 a week when she and her four children were abandoned by an alcoholic husband/father.

At that time we lived in the government projects and stayed at a locally funded government daycare while Mama worked. So maybe you can see that when Republicans say they are not dependent on government, and turn welfare recipients into mooching caricatures, they slap the face of innocent hard working mothers, fathers and their children.

You certainly know that President Bush--the leader of the Christian, "self-made" Republicans--was born into a powerful and rich family. He never went to bed hungry (like my family did) and never knew the meaning of panic. I don’t expect someone like that to empathize with the poor.

Yet we were lucky, we were white, I can't imagine how hard it was for African-American families back then (and now). We four children are now in our 40s and 50s and are having a wonderful and successful life. Yet we know, all too well, that there are needy families out there. Not the caricatures presented by the conservative media, but folks who by LUCK of birth, race and economic circumstances, need and deserve help.

I be interested in knowing how you reached your political worldview.

Posted by: Larry | Nov 11, 2004 7:27:47 PM

The last line should read: I'd be interested in knowing how you reached your political worldview.

Posted by: Larry | Nov 11, 2004 7:31:55 PM

Gee Mike--what about those Reagan and Bush era deficits? Are you going to blame those on liberals as well? As for the Clinton years, yes, liberals were worried about the things you mentioned but you know what? Clinton ultimately went along with it. So for all of your crying about "rhetoric", the budget did get balanced during those years, so your argument is worthless because no one, Democrat or Republican, was overspending. You still haven't accounted for the Reagan, Bush I and Bush II years, in which deficits ballooned and government spending kept increasing. Did Bush II veto a single spending bill? Did the Republicans control both the House and the Senate? You haven't proven anything.

I did like this however, "Charles Foster Kane's post is a perfect example of a liberal swipe - bandying about phrases like "simple minded", etc. You'll *never* win a convert with that kind of arrogant tone."

Calling an argument simple minded is arrogant? Arrogant would be me saying "Sit down little boy and let me explain to you how the world works because I'm the only one who has it figured out." Unfortunately, you've already filled that position, as shown in your respsonse Cal D: "Chortle - is that all you got? Why did you bother to post?"

Mike, your construction is in fact simple minded: "You guys put yourselves in this position - 40 years of overspending on failed social programs, conbined with the shrill attacks ever since Reagan took office have sickened alot of people." Given that Republicans have had far more control over the government during the past 40 years than liberals have, I would say that there is more than enough responsibility to go around on both sides. So yes, trying to account for the current state of the Democratic party in one sentence is simple minded. And no, I'm not trying to convert you. I'd much rather let you stew in your own sense of victimhood, to wit: "Your preferred system takes money involuntarily, under threat of imprisonment and transfers it to people who in many cases do not deserve it."

Posted by: Charles Foster Kane | Nov 11, 2004 7:59:18 PM

easy way to fix it.. lower the federal goverment income tax, increase the rate in each of our states, and keep it in house..

btw, those red states don't really need to feed you all if you really don't want it

Posted by: cody | Nov 11, 2004 8:46:43 PM


Larry said:

"$75 billion a year is spent in corporate welfare."

Hm. That's really not much, compared to the $390B spent on Social Security alone. The point is that social spending far outstrips pretty much everything else, except defense spending.

Charles Foster Kane said:

"You haven't proven anything."

I've proven one thing, for sure. When you're proven wrong about something (your assertion that "Clinton balanced the budget"), you'll throw a thousand red herrings in the hope that nobody notices.

"Calling an argument simple minded is arrogant?"

Yes, it is. Simple minded is an insult; you know it and so do I. Regarding my reply to Cal D: His post was essentially a rather simplistic challenge, so I addressed it as such. You'll note that in addition to chuckling, I actually answered the issue raised.

"So yes, trying to account for the current state of the Democratic party in one sentence is simple minded"

So, succinctly stating something, even if it's just a single sentence, is simple minded? Tell you what - let's see your summation, then.

"I'd much rather let you stew in your own sense of victimhood, to wit:"

It has nothing to do with victimhood. A fact is a fact. The federal government has placed itself in the position of arbiter of goodwill. It takes money from those who earn it and gives it to those who don't. In many cases, the recipients are undeserving. What about that can you dispute?

mike


Posted by: mike | Nov 11, 2004 9:12:19 PM

Mike: In many cases, the recipients are undeserving.
-------------------------------------------------
Your statement infers there are deserving among us. I understand you are concerned your taxes may go to some that don't deserve it, what about the recipients that are deserving?

Posted by: Larry | Nov 11, 2004 9:22:45 PM

I have conservative (Republican and Libertarian) friends that overtly agree with you, yet many of them quietly accept government assistance or look the other way when a friend or family member needs and receives government help.

In other words it is classic "do as I say not as I do."

Posted by: Larry | Nov 11, 2004 9:38:52 PM


Larry wrote:

"I be interested in knowing how you reached your political worldview"

Larry, I'm beginning to respect you. You seem to be a pretty level-headed person.

I grew up around tons of overeducated stuffed shirts like certain posters here. They don't impress me, because most of them wouldn't know where to start if you took away their money and their papers. They don't really know how to build a life, they know how to stand on the shoulders of someone else who has made the tough choices and sacrifices.

I grew up the child of an alcoholic father and a MPD mother. I was regularly beaten (beaten means "it left marks" and I was thrown across rooms and through walls) and finally cast out for the first time at the age of 15. In a 3-year fit of schizophrenia, my parents couldn't reconcile throwing their child out in the street. They were, after all, both college professors!

Anyhow, I finally decided after fighting with my parents for several years and living in various places from greenhouses to my friends' places that I needed to do something. I joined the armed services, served multiple hitches as a ROMAD (Recon, Observe, Mark and Destroy), then cross trained as a computer tech, then seperated. The armed services taught me to be a man and that I had the stuff I needed to succeed. I've been in the computer industry ever since, going from hardware to software and computer security. I am at the top of my field, working with people who typically have either a masters' or doctorate. I have to work my tail off to keep up with them, because I'm not as intelligent, but it's worth doing. Not bad for a guy whose dad once said "You'll never amount to anything".

So, in a nutshell, that's what defines me. Can't never could and quite frankly, if you don't have the sack to do for yourself, you shouldn't expect anyone else to do it for you. I'm sorry if that's cold; I had to dig myself out of a hole and if I can, then why can't others?

mike

Posted by: mike | Nov 11, 2004 9:45:35 PM

Mike:


You keep avoiding my assertion that the federal government has been controlled by Republicans for the majority of the past 40 years so that respsonbility for spending and deficits is a burden shared by both parties. During the Clinton administration, the budget became balanced. That is not a red herring, it is a fact. How would you rather I have worded it? Congressional Republicans forced Clinton to balance the budget? That doesn't change the fact that the budget was balanced. And pointing out the deficits and spending increases under Reagan, Bush I, and Bush II are red herrings? It would seem that they undermine your argument that Democrats were the ones spending all the money.

And again, you are playing the victim. The federal government takes your money, against your wishes, and gives it to people you consider undeserving.

Finally, you say: "I grew up around tons of overeducated stuffed shirts like certain posters here. They don't impress me, because most of them wouldn't know where to start if you took away their money and their papers. They don't really know how to build a life, they know how to stand on the shoulders of someone else who has made the tough choices and sacrifices."

Mike, you know nothing of me, or my life, except that we disagree. But because of our disagreement you feel free to make assumptions and personal attacks. That is the height of arrogance.

Posted by: Charles Foster Kane | Nov 11, 2004 11:38:30 PM

Mike,
Thanks for taking the brunt of the attack.
I grew up as a poor kid on the other side of the tracks. I lived in government projects for a while after my dad got out of the Marines. He was in during the Vietnam war. He had a job but some relatives we were renting a house from threw us out after some shady work on their part. My dad didn't make enough to live somewhere else so we moved to the projects. It was tough being the only white kids there and I used to get chased home from school (first grade) and occasionally get beaten up by gangs because I was white. We finally moved out of the projects into a converted garage where I grew up. I joined the Navy because there was no money for college and I wasn't a minority so free rides weren't available. I helped my parents by sending money home and now I work in Nuclear Power and make a decent living at it. I pay far more taxes than I receive from the government and I vote Republican. I live in a decidedly blue state (Connecticut) yet if you look around your local area you will see most really nice houses with Bush stickers and most inner city areas with Kerry stickers. It is the well-to-do Reds in the Blue states who are paying the bills. That is a fact anyone can confirm by driving around in the suburbs surrounding large cities. I know many people who allow the government to pay their bills and feed them because they think they deserve it. I know people who won't get jobs because it is more lucrative to stay on government assistance. I pay for all of that. I don't want to. I don't mind helping someone who is in need of it, but I don't like paying so someone doesn't have to work. If you even suggest cutting back on welfare to only those who truly can't work you will have an outcry from the inner cities. They expect me to pay their way and give their kids a free ticket to college while mine will have to work their way through since I pay too many taxes to save alot of money for their college. All the while not qualifying for help since I make too much money which ends up going to taxes.
Democrats like to point to Reagan, who was spending our way out of the cold war, and President Bush I and II and say see Republicans spend too much. They then point to Clinton, where we finally got a Republican House and Senate, and say see Democrats don't spend that much. In fact it had more to do with economic swings and delayed reactions to governmental policies which gave President Clinton so much money. He didn't cause such a boom in the economy he was just a lucky recipient of it.
I knew this Presidential race was important because the economy is recovering and will ramp back up. Democrats wanted to take credit for this, if Kerry got in, and show how their policies are so effective. When in fact the recovering economy had nothing to do with their policies and was only a) part of an economic cycle and b) in part due to President Bush's aggressive stance to get the economy turned around.
I like to help people, some people really do need help. It is my opinion based on personal experience that most don't need all the help they are getting.
Someone brought up there were higher divorce rates in red states. Is this because in blue states people are far more likely to live together and not get married right away where as in the red states that is not as prevalent? Is there a higher teen pregnancy rate in red states because they are less likely to be shuffled to an abortion factory where details are hidden in the name of reproductive rights? In addition is it more likely that birth control pills are handed out like candy to twelve year old girls more frequently in blue states than red?
I work in Nuclear power and I am telling you that it is easy to make the statistics say whatever you want them to by emphasizing the ones that say what you want and ignoring the others. I live in the real world, statistics quoted to me only tell me you are hiding something you don't want me to know.

Posted by: Roger | Nov 12, 2004 8:42:22 AM

Mike,
I appreciate your story and your success.

It is interesting that although we both had our share of struggles --indeed we might be considered the Republican/Libertarian stereotype of a "self-made" man --we differ.

Where we differ is I can't give myself all the credit (I'm not saying that you do). I am white and I've had my share of luck (being at the right place at the right time). I realize that others (nameless and faceless as they are) work just as hard as me are not so lucky (or white).

Here is a true story. I was teaching guitar to a friend who worked at a local university. My friend, I must admit, was a bigot (we had plenty of "discussions" about that). During our guitar lessons he would sometimes go off about that "god damn affirmative action" and how women and blacks (you can imagine his actual words) were getting all the jobs at the university. Eventually he told me about a job opening there and I applied and got the job. From the way my friend talked I thought that many of my co-workers would be women or black --they were not! Out of about 30 workers in my area there were 2 women and 2 African-Americans and the rest were white. The job oppurtunities were based more on the "buddy system" than anything else.

Posted by: Larry | Nov 12, 2004 9:23:25 AM

Charles Foster Kane wrote:

"You keep avoiding my assertion that the federal government has been controlled by Republicans for the majority of the past 40 years"

That's because you're wrong. Congress was controlled primarily by dems for approximately 40 years, up until the mid 90s, when Gingrich and his crew were elected. That election was a direct reaction to Clinton's attempts at federalizing healthcare, another program that would have had disastrous consequences if it had been allowed to see the light of day.

Yes, the president signs the budget and yes, Reagan spent like it was going out of style. He had to in order to rebuild the military after Carter was through with it. In the final analysis, Congress drives what's in the budget and dems were in control of that for many decades.

"Mike, you know nothing of me, or my life, except that we disagree. But because of our disagreement you feel free to make assumptions and personal attacks. That is the height of arrogance."

Wow, aren't we presumptuous? Was your name in there somewhere or is this the rat smelling his own hole?

Oh - and Thanks, Roger. It's nice to hear from a fellow vet.

mike

Posted by: mike | Nov 12, 2004 9:37:02 AM

Larry wrote:

"The job oppurtunities were based more on the "buddy system" than anything else."

Yeah, my older brother used to work at the university where my parents taught. I noticed that all his friends and co-workers were either grad students or the offspring of faculty. There seems to be alot of nepotism in academia. There are also some incredibly bright people there, usually doing postgraduate work of one sort or another.

Re: bigotry

One thing the military will teach you is that there's no place for it. I was in a unit that parachuted from aircraft and directed fire at the opposing force. You learn really quickly that skill and training are what's important.

I won't say that I've had no luck in my life; that would be foolish. What I believe is that there are those who are prepared, psychologically, monetarily or educationally are the ones who capitalize on breaks. Those who aren't prepared have to sit and watch as the big fish swims on by. I have always tried to live my life prepared for opportunities; so far, that strategy has worked. I've missed some and luckily, I've managed to take full advantage of others.

One thing you asked me earlier when unanswered: Who do I think is needy?

I consider the needy to be those who truly cannot do for themselves. The mentally or physically incapacitated. The rest of us are able-minded and bodied. There's no reason we can't support ourselves. I don't consider lack of preparedness a need.

mike

Posted by: mike | Nov 12, 2004 10:29:50 AM

cody says:

> btw, those red states don't really need to feed
> you all if you really don't want it

Well, excuse me, but "blue" Wisconsin is a food exporter. But even if one were to stipulate to the untrue fact that everything "blue" states eat is produced by "red" states, and that red states never import anything of any kind from blue states, that would remain a non sequitur with respect to my wealth-redistribution comments.

I am a reasonably minded citizen who thinks there has been plenty of screwing up by both major parties, but it's obvious to me the Republicans are driving us down the road to collective ruin at a higher velocity; for example, supporting tax subsidy and economic policies that outsource high-paying jobs not just to Third World countries but also from one state to another in a mind-boggling race to the bottom.

Despite this trend, low-service states continue to enjoy greater than average helping of federal subsidies, and it comes as a cost to more prosperous states. It's somewhat analagous to the kid who kills his parents and then begs for compassion from the court since he's an orphan.

Related to these red-blue state redistributions is the philosophy behind Bush's free-lunch tax "cuts," which are really upward tax redistributions. Close to 100 major coporations in this country have paid NEGATIVE income taxes in recent years -- i.e., despite earning billions, they actually vacummed up tax dollars from the federal treasury, which had to be covered by middle-class taxes or by raising the debt ceiling. A company like Boeing paid less in corporate taxes altogether than just one Joe Sixpack, with the declining earning power of his $8/hour floor job at Big Box Retailing.

Yet you're telling Joe Sixpack his nemesis isn't the GOP. The GOP, by the way, which is seriously now thinking of going entirely to a national sales tax; a tax that can't possibly be revenue neutral unless it's in the 40-50% range, which means it'll be highly regressive, again effectively lowering taxes on the rich and raising everyone else's. Once again, as with the Social Security fixes they propose, conservatives are not interested in this pesky math, which clearly shows the foolishness (never mind unfairness) of their proposals. Rather, they just enjoy the buzz of acting "bold."

Now I already know how my debating opponents will respond. It's how they've been responding for about 20 years, and in fact is the way Bush responded in the campaign, namely, that big companies will just pass along the cost of their taxes to consumers anyway, while rich folks will hire clever lawyers and accountants to find the loopholes we left there for them. So why even bother trying to tax the well-off at an equitable rate? You'd think a "moral" man like Bush [net worth: $20 million; not bad for a lifelong diletante] would know the answer.

In the first place, it's evident (read some annual reports, whydontcha?) that companies often choose to eat added costs, for competitive reasons. But even in the case where a corporate tax bill might be entirely reflected in a higher product price, the consumer at least still has choices. Milton Friedman should be so happy. Besides, corporations increasingly (thanks to GOP laissez faire policies) socialize hidden costs of many products, e.g., pollution. It'd be smart to expose more of those costs through taxation, lest the free-lunch fantasies continue.

Besides, cutting corporate taxes, as Citizens for Tax Justice has shown, does not often lead to increased corporate investment. We're instead back to the robber baron era: Pay me a ransom or I'll move my company -- to the next town, or the next state, or the next country. But even after you bribe me, I may just move anyway, because you're gullible, and you can't stop me.

Wal-Mart is a classic example. It opens and closes stores constantly, but only after extracting huge concessions from anxious local burghers. And, it strong-arms its suppliers, affecting the whole economy and muscling out the competition through sheer buying power -- rather like the Republican leadership.

As I said: A race to the bottom, and a Ponzi scheme of gargantuan proportions. Will come the time (the "end" time?) where average wage earners won't even be able to afford the price of cheap imports, much less American-made products. Economically, Kansas already looks a lot more like Peru than, say, Wisconsin. The problem is, it's dragging the Wisconsins down with it.

Posted by: rlegro | Nov 12, 2004 11:35:27 AM

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