Reality Versus Rhetoric in Conservative “Anti-Government” Philosophy

Red states are the biggest “takers” of federal funding.

It is generally accepted that a major difference between Republicans and Democrats is their views about the size of the public sector. But ironically enough, data show that the states that tend to vote Republican in presidential elections are also the ones that tend to benefit most from federal spending.

Bigger, richer states on the coasts and in the upper Mid-West have been subsidizing smaller, poorer states with lower state GDP per person in the South, South-West, and Mountain regions for decades by paying more in federal taxes than the amount of benefits they receive in return. In 2012, the 15 biggest “giver” states had 42 percent of the population, GDP per person of $53,700 (in 2009 dollars), and accounted for 46.9 percent of the country’s overall GDP. In contrast, the 15 states that received the greatest share of benefits from the federal government relative to what they paid in had 13.3 percent of the population, GDP per person of $42,800, and accounted for just 11.9 of the country’s GDP.

This little known fact comes from reports by the Tax Foundation that estimated the total federal taxes paid and federal benefits received by each state from 1981 to 2005 (updated figures are potentially pending). The key metric is the ratio of benefits to taxes, where a figure greater than 1.0 means that states are getting more benefits than the taxes they pay. A figure under 1.0 means that states are paying more taxes than benefits received.

Over these years, there has been remarkable consistency in where most states stand in terms of this metric. New Mexico, for example, has consistently ranked as the top “taker” in benefits collected versus taxes paid, while New Jersey has consistently ranked as among the biggest “givers” of taxes paid versus benefits received (Washington, DC is not included because it is home of the federal government and obvious has a great amount of federal spending).

It would stand to reason that the states that benefit most from federal spending would support the political party that would keep the funding flowing. And it would seem that the states that benefit least would want smaller government and less spending. Yet the opposite seems to be the case.

Looking at the presidential vote in 2008 and 2012, all of the 15 states with the worst balances (a ratio of .93 or lower) – i.e., the biggest givers – voted for Barack Obama in both elections. In contrast, the 11 of the 15 states with the best balances (1.36 and higher) – i.e., the biggest takers – voted for the Republican candidate.

Data sources: Tax Foundation; Author’s calculations

Conservatives fail to see this imbalance for two reasons. First, their rhetoric seems to misconceive how the federal government really spends its money. In particular, they seem to consistently overestimate how much America spends on foreign aid and the poor. Second, conservative rhetoric seems to mentally divide public spending into two components: “good” spending on the military, agriculture, and the elderly (who are seen as having already “paid for” their benefits) and “bad spending” on excessive regulations, foreign affairs, and support for the urban poor.

But what conservatives fail to see is the extent to which their base constituency relies on the federal spending that they seem to eschew. While it’s unclear what could make the conservative base change its perceptions about government and federal spending, what is clear is who will hurt most if the policies conservatives espouse come to pass.

Stephen Rose

Stephen Rose is a Research Professor at the George Washington University Institute of Public Policy. A well-known labor economist, he is the author of Social Stratification in the United States, first published in 1979.