Red States vs. Blue States
A classmate wrote me the following email:
I read your post on the tax/spending distribution between red and blue states, and had to comment on it b/c it's a pet peeve issue of mine. Although I am a blue-stater who paid over six-figures in taxes last year, the claim that red states are fiscal leeches of blue states is, well, a red-herring.
The Tax Foundation -- which is the source for the stat that red staters take in more federal money than they pay in taxes -- lists three reasons why this disparity exists: http://www.taxfoundation.org/ff/taxingspendingupdate.html
(1) The main reason for this disparity is that the population is older in the red states (at least right now), and hence more red-staters receive Social Security and Medicare. Given that entitlements comprise the majority of the federal budget, it's not surprising that this is the main reason for the disparity. Twenty or thirty years from now on, it is quite possible that it will be the blue-states that have an older population and hence will take in more federal money than they pay in taxes.
(2) More defense bases are in red states than in blue states. But since the military protects all of us, it's not fair to somehow claim that the red-staters are leeching off the blue-staters.
(3) There are higher-income folks in the blue-states, so they pay more. But since so many high-income blue-staters are the ones who vote for politicians who will raise taxes on them, there's no basis for the complaint that blue-staters are getting the short end of the stick.