STATE FEDERAL TAX RECEIPTS AND “RIGHT TO WORK”

Many “blue” states, implementing “blue policy”, contribute more to the Federal government in taxes than they receive back in Federal payments. “Red” states often receive more in Federal taxpayer dollars than they pay in taxes. “Blue states” tend to support unions, spend more on education, have more businesses, have stronger economies, and are more prosperous.

Analyzing dependence on Federal tax dollars, “blue” states are less dependent on the Federal government and tend to contribute more tax dollars that are flowing to “red” states. After this election, we are potentially positioned to implement more “red” economic ,policies, ones that have not been unsuccessful, from an economic perspective, but are likely to be approved by a “red” Congress.

WalletHub does an analysis of Federal dependency on tax dollars and provides an overview analysis using a methodology that introduces a number of factors.

https://wallethub.com/edu/states-most-least-dependent-on-the-federal-government/2700/

Below is WalletHub’s 2016 Federal dependency ranking, color coded by their Electoral College vote as “red” or “blue.” In general “red” states are more dependent than “blue” states.

To summarize the results in bottom half, or most dependent states, the states are 76% “red” and 24% “blue’. There are more “red” states than ‘blue’ states, which explains part of the difference. However, If you look at the bottom ten, the results display a consistent pattern, 90% “red” versus 10% “blue”.

The pattern is different when reviewing the top half, the least dependent states. In the top half, the least dependent states, 44% are “red” and 56% are “blue”. Reviewing the top ten, 90% of the states are “blue” and 10% are “red”

 

 

Rank State Total Score ‘State Residents’ Dependency’ Rank ‘State Government’s Dependency’ Rank
(1 = Most Dependent)
1 Mississippi 62.08 11 1
2 New Mexico 55.45 2 8
3 Alabama 53 5 9
4 Louisiana 51.29 39 2
5 Tennessee 50.07 20 3
6 Montana 49.51 12 6
7 South Dakota 49.34 19 4
8 Kentucky 47.37 10 12
9 West Virginia 46.64 7 16
10 Missouri 45.07 30 5
11 Georgia 44.12 26 7
12 Maine 44.03 13 10
13 Arizona 42.64 14 14
14 South Carolina 40.98 4 30
15 North Dakota 40.49 1 50
16 Wyoming 40.39 24 11
17 Idaho 39.73 18 15
18 Indiana 39.52 15 20
19 Oregon 38.96 27 13
20 Oklahoma 38.83 16 17
21 Vermont 36.74 21 21
22 Maryland 36.22 6 33
23 Rhode Island 35.39 31 18
24 Michigan 33.16 34 23
25 Ohio 32.97 45 19
MEDIAN — HALF ABOVE AND HALF BELOW
26 North Carolina 32.89 33 25
27 Arkansas 32.77 37 22
28 Pennsylvania 31.68 17 29
29 Texas 31.67 41 24
30 Florida 31.43 29 28
31 Iowa 30.22 40 27
32 Nebraska 30.22 42 26
33 Utah 27.81 22 31
34 Wisconsin 24.93 23 36
35 Colorado 23.89 28 35
36 Washington 23.49 25 37
37 Hawaii 23.38 3 49
38 Massachusetts 22.94 43 32
39 Virginia 22.59 9 47
40 Alaska 21.69 8 48
41 New York 21.07 46 34
42 New Hampshire 19.57 44 38
43 Minnesota 17.31 48 39
44 Nevada 17.1 32 43
45 Illinois 16.36 47 40
46 California 16.25 36 42
47 Kansas 15.78 38 44
48 New Jersey 14.76 49 41
49 Connecticut 13.42 35 46
50 Delaware 12.9 50 45

 

RIGHT TO WORK

“Right to work” is a driving ideology of the conservative agenda and it is considered to be a big Republican success when a state becomes “right to work” and has effectively weakened union and other liberal labor goals. However, “right to work” is not the only strategy available to states to spur economic development and may have detrimental side effects. A course of action that included reviewing at “blue” state policies, or even other countries that have faced the same issues, is a good way to broaden the approach.

A major issue is the continuing drive to create “right to work” states and to break up existing unions while making it difficult for new unions to form. Republicans have been successful in moving states to “right to work” status.

It is acknowledged that this is a complex, nuanced issue that does not lead to easy answers. That said, it is clear that the “right to work”, “red” state economies are not as strong as the “blue” state economies. Many other measures support and lead to similar conclusions, coming from different perspectives. “Right to work” policies do not necessarily lead to strong economies. In fact, there is danger for states to pursue a low wage strategy or “right to work” since low wages lead to low taxes meaning less for education, infrastructure and the amenities that draw businesses. The creation of high wage jobs is very dependent on access to a well-educated workforce, especially in a technology-driven, global economy. There are many other factors that are much more influential than “right to work” in creating vibrant economies.

The Atlantic has done numerous articles on the economy and workforce, examining from many different perspectives. This 2014 article provides a good summary of Federal dependency..\

https://www.theatlantic.com/business/archive/2014/05/which-states-are-givers-and-which-are-takers/361668/

A thoughtful 2013 article from the Atlantic predicts how the current economic inequalities between states set the stage for the 2016 election results.

https://www.theatlantic.com/magazine/archive/2013/10/the-boom-towns-and-ghost-towns-of-the-new-economy/309460/

Marc Tucker, the leading US authority in education benchmarking and comparisons, is the CEO of the National Center for Education and the Economy (NCEE) wrote this article a year ago in 2016 describing how a low wage strategy leads to a downward spiral for economies. The article describes the strategy by a country like Singapore that pursued a low wage strategy at one point in their history and then switched to a high wage strategy..

http://ncee.org/2016/02/the-low-wage-strategy-in-the-south-is-it-the-future-for-your-state/

The story of the impact on an individual in a low wage, “right to work” state was presented in a Washington Post article, putting a very human face on the results of pursuing a low wage strategy.

http://www.washingtonpost.com/sf/business/2015/12/01/a-grim-bargain/

 

RIGHT TO WORK, VOTING PATTERNS AND FEDERAL DEPENDENCY

There are 25 “right to work” states. Of those 25 states, 23 are “red” states and only 2 – Nevada and Virginia – are in “blue states. The 25 “right to work” states are Alabama, Arizona, Arkansas, Kansas, Florida, Georgia, Idaho, Indiana, Iowa, Louisiana, Michigan, Mississippi, Nebraska, Nevada, North Carolina, North Dakota, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Wisconsin, and Wyoming.

The key question is do “right to work” states have stronger economies? Using the measure of dependency, the answer is no. Of the top 25 states, only 11 out of the 25 above the median, or 44% are “right to work”. If you look at the top 10 states, only 2 out of 10, or 20%, are “right to work”. If you look at the bottom 25 states, there are 13, or 52% that are “right to work”. And if you look at the bottom 10 states, 50% are “right to work.”

https://wallethub.com/edu/states-most-least-dependent-on-the-federal-government/2700/

NOTE: “Right to work “ states are highlighted in yellow.

 

 

Rank State Total Score ‘State Residents’ Dependency’ Rank ‘State Government’s Dependency’ Rank
(1 = Most Dependent)
1 Mississippi 62.08 11 1
2 New Mexico 55.45 2 8
3 Alabama 53 5 9
4 Louisiana 51.29 39 2
5 Tennessee 50.07 20 3
6 Montana 49.51 12 6
7 South Dakota 49.34 19 4
8 Kentucky 47.37 10 12
9 West Virginia 46.64 7 16
10 Missouri 45.07 30 5
11 Georgia 44.12 26 7
12 Maine 44.03 13 10
13 Arizona 42.64 14 14
14 South Carolina 40.98 4 30
15 North Dakota 40.49 1 50
16 Wyoming 40.39 24 11
17 Idaho 39.73 18 15
18 Indiana 39.52 15 20
19 Oregon 38.96 27 13
20 Oklahoma 38.83 16 17
21 Vermont 36.74 21 21
22 Maryland 36.22 6 33
23 Rhode Island 35.39 31 18
24 Michigan 33.16 34 23
25 Ohio 32.97 45 19
MEDIAN — HALF ABOVE AND HALF BELOW
26 North Carolina 32.89 33 25
27 Arkansas 32.77 37 22
28 Pennsylvania 31.68 17 29
29 Texas 31.67 41 24
30 Florida 31.43 29 28
31 Iowa 30.22 40 27
32 Nebraska 30.22 42 26
33 Utah 27.81 22 31
34 Wisconsin 24.93 23 36
35 Colorado 23.89 28 35
36 Washington 23.49 25 37
37 Hawaii 23.38 3 49
38 Massachusetts 22.94 43 32
39 Virginia 22.59 9 47
40 Alaska 21.69 8 48
41 New York 21.07 46 34
42 New Hampshire 19.57 44 38
43 Minnesota 17.31 48 39
44 Nevada 17.1 32 43
45 Illinois 16.36 47 40
46 California 16.25 36 42
47 Kansas 15.78 38 44
48 New Jersey 14.76 49 41
49 Connecticut 13.42 35 46
50 Delaware 12.9 50 45

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Common Ground
We don’t need to search any further for common ground in our country. We have it.
We all want the same things – a safe, prosperous, free, democratic nation with opportunity for all. At the same time, we will all be harmed if our democracy, our free press, our Constitution and our core American values are threatened. We will all certainly be harmed if reckless behavior triggers any number of potential armed conflicts.

None of us know how this will all play out so let's make a deal. Let’s get up to speed on the issues, establish some facts, take action and watch what happens together . . .