For Dems and Republicans, tax confusion permeates parties

In a comical instance of political irony, data from the 2010 Census and the Internal Revenue Service show that conservative “red” states receive more federal aid than their liberal “blue” counterparts. To anyone familiar with the Republican Party’s firm, anti-tax stance, this data should be quite confounding.

According to MotherJones, red states in the 2008 presidential election received a significantly larger sum of federal aid than blue states. According to 2010 Census and IRS data, red states received $1.46 for every dollar paid in federal taxes, whereas blue states received only $1.16.

So then why would red states so feverishly oppose federal taxation when they reap the most benefit from it? Further, why do those states receive more tax dollars in the first place? Ultimately, it comes down to misguided perceptions in regards to where tax dollars go on both ends of the political spectrum.

One conclusion suggests that the difference is due to a larger urban population in blue states as opposed that of more rural red states. Rural states received about 81 percent more federal spending than they paid in taxes, while urban states, with larger populations, receive only 44 percent of what they paid.

Red states tend to have lower median incomes than blue states and, due to a progressive federal income tax, their residents end up paying less in federal taxes than residents of blue states. For this reason, the federal spending that is pumped back into the state systems becomes unevenly distributed among states that need more aid yet cannot necessarily pay more taxes.

Admittedly, this explanation still ignores the seeming inconsistencies of conservatives who demand smaller government but receive a larger amount of government assistance and of liberals who pay more into a tax system from which they reap relatively little benefit.

A possible reason for that paradox may be widespread misinformation among voters. According to Veronique de Rugy, a senior research fellow at the Mercatus Center at George Mason University, “The people who benefit the most from federal spending simply don’t understand how much money they receive; they assume that their tax dollars are subsidizing others when in fact they are the ones being subsidized.”

Ironically, conservatives in red states that receive more handouts are under the wrong impression that their taxes are pooled in other states, so that they are paying for another’s subsidies.

As for more liberal citizens in blue states, Rugy said that they “may assume they are the ones who get the most subsidies. In turn, they vote for big government politicians, thinking that welfare spending will ease social frictions in big cities.”

Again, the voter is misled by faulty information into voting for the wrong candidate – with good intentions, however.

“Ultimately, everyone is wrong,” Rugy said.

Interestingly, either side of the spectrum, whether urban-liberal or rural-conservative, proves a lack of understanding in the direction that taxes take once paid. Both parties thus advocate for causes counterproductive to their own political needs.

Whatever the case, voters on either end should take heed of the disconnect between their political views and their actual voting interests.