Our Fair Share?

An article by Robert Sullivan in the summer issue of MassINC’s Commonwealth magazine takes a quick look to see which states profit from federal spending. Guess what?

The Big Dig notwithstanding, Massachusetts is one of the biggest losers in the tax-and-spend game run by the federal government. According to the Washington, DC-based Tax Foundation, in fiscal year 2002 the state got only 75 cents in federal expenditures in return for every tax dollar Bay State residents sent to the nation’s capital. Since 1990, when the state got $1.08 back for every dollar, Massachusetts has fallen from 25th to 46th in the ratio of federal benefits to federal taxes. We’ve fallen seven places since fiscal year 2000, when we ranked 39th and got 86 cents back for every dollar.

At first that seems outrageous, but when you look under the covers a little, you see that we are actually getting our fair share, sad as that is.

The biggest factor pushing Massachusetts down the list may be the state’s high personal income, which means that a relatively large number of citizens have high federal tax bills and a relatively small number qualify for federal programs based on income eligibility. Based on 2001 income tax returns, the IRS estimated that only two states have higher average personal incomes: Connecticut and New Jersey, which fare even worse than Massachusetts in getting their federal tax dollars back.

We’re rich, rich I tell you!

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