Louisiana benefited from billions more in federal spending than taxpayers sent to Washington in 2017, according to a new report out this week.
The Rockefeller Institute of Government’s analysis of federal government spending and its impact on the states found Louisiana got back $1.52 for every $1 paid to the federal government that year. Overall, about $34.2 billion in taxes flowed to Washington, while the federal government spent $52 billion here -- a net gain of about $17 billion. Researchers factored federally-funded programs, including Social Security, as well as federal employment wages.
“Some states receive far more in federal spending than their residents and businesses pay through taxes, while other states give far more than they get,” Rockefeller Institute researchers wrote in their summary of the annual “Giving or Getting?” report.
Louisiana leaders are closely monitoring state services that have not yet but ultimately could be affected as the federal government shutdown …
While most states receive more in federally-funded services than they pay to Washington, only 14 received a better return than Louisiana. Kentucky, which gets back $2.35 for every $1 taxpayers send to Washington had the greatest return.
On the opposite end of the spectrum, just 10 states received less than a dollar in federal investment for every $1 sent to Washington. Connecticut receives just 74 cents for each dollar sent to DC.
Rockefeller researchers explained in the report that a variety of factors come into play – poorer states, like Louisiana, get more money through federally-subsidized safety net programs, including Medicaid, food stamps and Temporary Assistance for Needy Families, for example. States that have older populations tend to benefit more from programs like Social Security and Medicare, and federal wages are concentrated in states with a large government presence.
“On the other side, receipts are generated primarily from taxes, the most significant of which is the personal income and employment taxes, which account for almost 75 percent of allowable federal revenue,” they wrote. “Logically, then, this federal revenue is raised disproportionately from residents of states with more high-income individuals who pay taxes at the highest rates under the progressive federal income tax structure.”
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