In his December 5 letter “Socialized Welfare States”, James Sickles proves the old adage attributed to Mark Twain that there are “lies, lies and statistics” when discussing “donor” states and states. “Providence”. As with many statistics, it is the details of the underlying metrics that are important.
On the one hand, we have taxes paid to the federal government by a state, while on the other hand, we have federal dollars accruing to that state. Assuming that fixed and graduated federal tax rates apply equally to all states, state tax outflows are approximately a multiplication of tax rates, median state income and the population of the state. The influx of federal dollars from the state mostly ignores median income and is allocated to states primarily on the basis of population.
Therefore, as stated on the worldpopulation.com website, âThere are currently eight US states that are considered donor states. The main reason these states see a negative balance is that they have some of the highest household incomes in the country, paying more in federal taxes. This, however, does not guarantee that they will receive more federal funding for things like Medicaid and education. “(Note that they refer to the same eight states in the same order as Mr. Sickles.)
In order for welfare states to pay their âfair share,â as the author suggests, you must either vary federal tax rates by state, artificially increase the median income of âwelfareâ states or reduce the median income of people. âDonor Statesâ. In view of this, I assume the author is in favor of the House’s proposed budget reconciliation bill, which increases the SALT cap from $ 10,000 to $ 80,000, thereby reducing the effective income of the wealthiest citizens. donor states and the federal taxes they pay.