Chip Taylor

Liberals say: "Redistribution bites."

A New York Times article addresses again the issue of how much states get back in federal spending of the taxes they pay to Washington. No really. That's what the article says:

During a typical year, New York State sends Washington about $15 billion more in taxes than it gets back in federal spending, according to a series of reports over three decades by the late Senator Daniel Patrick Moynihan and researchers at the Kennedy School of Government at Harvard.

New York State pays federal taxes? I call bullshit.

What they mean is that in a typical year, people in New York State send Washington about $15 billion more that people in New York State get back in federal spending. Of course wealthy people pay more of the taxes; poor people get more of the spending. Since New York State has relatively more wealthy people it sees the net outflow.

Its a sure sign of collective-type thinking when politicians talk about what the state gets back and what the state pays.

This article notes a couple of sources of irony. First, since their are many wealthy folks in New York, it benefits (to use the collective terminology) disproportionately from the recent tax cuts, but NY politicians don't see it that way.

Second, voters in the "beneficiary" states tend to elect legislators that want to cut taxes; those in the donor states tend to elect the ones that want to raise taxes.

New York Democrats vote for big government even if they get stuck with the bill, and Republicans in red states vote for [tax cuts] even if it means giving up the city slickers' money.

Of course, if you don't actually cut spending then the red-staters are unlikely to feel any pain from the tax cuts.

But anyway, here is the part that prompted me to post:

New York politicians have vowed to fight for their fair share, along with other big losers like New Jersey, Connecticut, Massachusetts, Illinois and California. Before becoming senator, Hillary Rodham Clinton promised to "create a coalition of the big states to stand up for our interests," but once in Washington she found the usual problem: a coalition of small states with more votes, especially in the Senate, and more clout, now that most of New York's legislators are in the minority party.

Another bit of irony. This redistribution from wealthy states to poor states (of which Sen. Clinton disapproves) is a direct result of the redistribution from wealthy to poor individuals (of which Sen. Clinton most heartily approves.) You could eliminate a lot of the first by eliminating or reducing the second, say with a single-rate tax. But she prefers a second round of redistribution, from poor states to wealthy states.

So, how exactly would she do that? Should wealthy people in poor states, say South Carolina, pay even higher tax rates than their counterparts in wealthy states? Or should the federal government spend more on poor people in wealthy states than they do on poor people in poor states.