Greenmail Income Tax, Flat Tax, or, No Tax?

Greenmail
Income Tax, Flat Tax, or, No Tax?

inverted man shaking coins out of pockets IRS

Gary Hunt
Outpost of Freedom
June 22, 2015

For those who believe that the federal government should tax us, either by income tax or a fair tax, or any other direct means of taxation, must understand that doing so only creates socialism among the states (taking from one to give to another), as the following table shows (A more complete table can also be found at Tax Foundation Special Report No. 158, “Federal Tax Burdens and Spending by State).

The table is from 2005 (I haven’t found a newer one, yet), so I would suppose that the only changes, absent minor redistributions of moneys, would be that the numbers have gone up, proportionately, in the last 6 years.

Note that $2,084,247,000,000 was taken in through taxes and that $2,210,184,000,000 was sent back to the states. This results in nearly $126 billion that was added back to the states’ side (to the benefit of the state). This additional money is likely a debt passed on to our posterity. And, this does not account for the many trillions spent by the federal government, each year, to support wars, foreign aid, and the expense of operating the government and its administrative agencies.

So, if the money never went to the federal government (income taxes), then the states would have had less revenue, even if they retained that which would have gone to the federal government for redistribution back to the states.

Now, there is also a loss in the administration of the distribution of the money. First, it is collected (IRS); then it has to go to the various agencies (accounting) for distribution back to the states (with all of the strings attached); then the state has to distribute the funds according to those strings, which, surely, requires a significant staff to assure that no money goes where the federal government does not want it to go, and vice-versa.

How much less would it cost if the states collected that money (and, being closer to home, might be more cautious in their raising taxes and spending recklessly, or to comply with federally mandated programs), and determined where it was to go, without federal intervention?

Now, if this does not convince you that a federal direct tax is unnecessary, and that it is used to manipulate social change and to bring the states into subjugation, then I would appreciate your explanation as to why it does not.

You should also note that Washington, D.C. gets back nearly six times, per capita, what it contributes, which amounts to over $65,000 per resident of that “model” city.

You can understand that rather than calling this blackmail, it is more appropriately defined as “Greenmail”.

Federal Taxes Paid vs. Federal Spending Received*
2005
State

Total Dollars ($millions)

Dollars Per Capita

Federal Taxes Paid to Washington, D.C. Federal Spending Received Federal Taxes Paid to Washington, D.C. State Rank     (1 is highest) Federal Spending Received
DC $6,735 $37,859 $11,582 1 $65,109
NM $9,891 $20,604 $5,153 47 $10,733
MS $12,434 $26,181 $4,281 51 $9,014
AK $4,830 $9,230 $5,434 19 $13,950
LA $20,563 $39,628 $4,565 50 $8,798
WV $8,815 $16,087 $4,861 49 $8,872
ND $3,829 $6,608 $6,031 37 $10,408
AL $24,675 $42,061 $5,434 43 $9,263
SD $4,840 $7,481 $6,256 29 $9,669
KY $22,003 $34,653 $5,283 46 $8,321
VA $60,185 $95,097 $7,981 11 $12,610
MT $5,228 $7,814 $5,605 40 $8,378
HI $8,519 $12,699 $6,709 21 $10,001
ME $7,728 $11,365 $5,868 39 $8,629
AR $13,926 $20,387 $5,030 48 $7,364
OK $19,572 $27,637 $5,532 41 $7,811
SC $22,711 $32,044 $5,364 44 $7,568
MO $35,171 $48,273 $6,078 35 $8,342
MD $49,178 $66,720 $8,812 5 $11,956
TN $35,872 $48,288 $6,041 36 $8,132
ID $7,728 $9,598 $5,440 42 $6,756
AZ $35,988 $44,639 $6,099 32 $7,564
KS $17,434 $20,492 $6,350 28 $7,463
WY $4,209 $4,782 $8,286 8 $9,414
IA $17,830 $20,345 $6,019 38 $6,867
NE $11,261 $12,785 $6,415 27 $7,283
VT $4,085 $4,645 $6,568 23 $7,468
NC $52,547 $59,162 $6,084 34 $6,850
PA $87,940 $99,503 $7,093 20 $8,025
UT $13,134 $14,823 $5,311 45 $5,994
IN $38,081 $42,347 $6,088 33 $6,770
OH $70,304 $77,881 $6,130 31 $6,791
GA $55,952 $59,846 $6,160 30 $6,589
RI $7,969 $8,423 $7,414 18 $7,836
FL $135,146 $134,544 $7,649 17 $7,615
TX $146,932 $148,683 $6,437 26 $6,514
OR $23,583 $22,792 $6,503 25 $6,285
MI $66,326 $64,787 $6,568 24 $6,415
WA $49,682 $46,338 $7,923 13 $7,390
MA $63,003 $55,830 $9,792 4 $8,677
CO $35,880 $31,173 $7,721 16 $6,708
NY $168,710 $144,876 $8,737 6 $7,503
CA $289,627 $242,023 $8,028 10 $6,709
DE $6,622 $5,495 $7,898 14 $6,553
IL $99,776 $80,778 $7,824 15 $6,334
MN $40,578 $31,067 $7,928 12 $6,415
NH $10,649 $8,331 $8,162 9 $6,386
CT $40,314 $30,774 $11,522 2 $8,795
NV $20,135 $14,089 $8,417 7 $5,889
NJ $86,112 $58,617 $9,902 3 $6,740
$2,084,247 $2,210,184 $342,368 $457,528

 

* During fiscal years in which the federal government runs deficits some spending is financed through borrowing. This creates implicit tax liabilities for states that must be repaid eventually. To incorporate these implicit tax liabilities into the analysis, the following adjustment was made to state tax burdens: First, the total federal tax burden is increased by the size of the federal deficit. Next, this total burden is allocated among states based on each state’s proportion of the actual federal tax burden. Finally, adjusted spending-per-dollar-of-tax ratios are calculated by dividing actual expenditures by the adjusted tax figure, effectively making figures deficit neutral.

Source: Tax Foundation Special Report No. 158, “Federal Tax Burdens and Spending by State,” and U.S. Census Bureau’s Consolidated Federal Funds Report for 2005.

 

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9 Responses to “Greenmail Income Tax, Flat Tax, or, No Tax?”

  1. […] the interim. As a local reformist group, TAG defeated the Austin Police Department’s enjoyment of greenmail from the federal government that was earmarked for training police officers to extract blood […]

  2. […] incentives lie with the Texas government? Au contraire, naïve patriot, for the phenomenon of “greenmail” ensures compliance with federal demands, as does the “equitable sharing” provisions integral […]

  3. […] any wonder why Wolf would be just slightly concerned about the Bozeman municipal police accepting greenmail in order to acquire an APC, given the fact that this exact same thing had happened the year before […]

  4. […] be considered federal “aid” monies for highway construction and maintenance; in other words, greenmail. He […]

  5. […] Greenmail could be defined as the public policy of the federal government using the congressional power of the purse against the member states of the Union by way of granting subsidies that are earmarked for specific purposes, and can easily be rescinded if the receiving state governments do not adhere to the terms and conditions of said federal subsidies. According to the latest primer on Texas highway funding by the Legislative Budget Board, federal funding comprised $3,036,800,000 in revenue for the State Highway Fund just this past fiscal year. These subsidies come straight from the Federal Highway Trust Fund, whose own revenues are collected from a federal gasoline excise tax, ostensibly to finance the National System of Interstate and Defense Highways. […]

  6. […] resistance has also been broached, given the reality of general funding with all the greenmail involved. The annual vehicle registration and emissions inspection fees come out (for me) to be ~ […]

  7. […] resistance has also been broached, given the reality of general funding with all the greenmail involved. The annual vehicle registration and emissions inspection fees come out (for me) to be ~ […]

  8. Is Ba says:

    Nice breakdown.

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