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After playing a 2009 video clip in which Republican Gov. Rick Perry touts states’ rights, MSNBC host Rachel Maddow suggested secession could hurt the Lone Star state’s bottom line.
"Many of these states flexing their 10th Amendment muscle, flexing their state sovereignty, even flirting with secession, states like Texas, Tennessee, South Carolina and Utah, one of these things about the states is that they all routinely get a lot more federal spending than they pay in taxes," she said on the April 12 edition of her weeknight show. A reader brought her comment to our attention.
Is Texas really getting more for less? To back up Maddow, MSNBC spokeswoman Lauren Skowronski pointed us to the most recent state-by-state analysis of federal tax burdens and spending by the Washington-based Tax Foundation, a business-backed tax policy group. It covers the 25-year period between 1981 and 2005.
According to the analysis, Texans paid about $147 billion in federal taxes in 2005 while the state received $149 billion in federal spending. That year, 33 other states also got, as Maddow put it, more money back than residents paid in.
The paid taxes included employment, estate and trust income taxes, among others. Federal spending in Texas includes funding for retirement and disability, grants (such as for research and construction), wages of federal employees and direct payments for programs such as Medicare.
On an annual basis, however, there were only six years in that time period when Texas residents paid fewer dollars in federal taxes than they got in return, according to the foundation.
And since 2005? For those numbers, Skowronski pointed us to the most recent federal tax data posted by the IRS and federal spending data from the U.S. Census Bureau.
In fiscal 2009, the IRS collected about $163 billion from Texans and the state received about $224 billion, for a net gain of $61 billion. Federal spending in Texas also exceeded tax payments in 2008 by $8 billion. It was the other way around in 2006 and 2007, when tax payments by Texans exceeded federal spending by a total of about $47 billion.
Eva DeLuna Castro, a budget analyst at Austin’s Center for Public Policy Priorities, which advocates for moderate- to low-income Texans, told us Texas started receiving more federal funds in the last decade because of an increase in military spending, tax cuts and tax credits and a modest growth in federal health spending — not to mention a spike in social services and aid every time a hurricane hit.
"Texas is definitely getting back way more than people in Texas are paying in taxes," she said. "So do a lot of other states. Texas isn’t unique in that."
In 2009, most states — there were 45, including Texas — received more than residents paid in taxes. Though no data is yet available, DeLuna Castro said Texas will again receive more than residents paid in taxes in 2010. But by 2011, when stimulus funds dry up, she speculated that Texas will revert to being a "donor state."
Summing up: The figures from our sources show two different trends. On an annual basis between 1981 and 2003, Texas almost always paid more in federal taxes than it got back from Uncle Sam. But since 2003 the reverse has been true, with Texas receiving more than it paid in five out of seven years, which is close to routine.
We rate Maddow’s statement as Mostly True.
MSNBC,The Rachel Maddow Show transcriptfor April 12, 2011
Tax Foundation,Federal tax burdens and expenditures by state, March 16, 2006
National Association of State Budget Officers, Fiscal year 2009 state expenditure report, published fall 2010
Tax Foundation, Federal taxes paid vs. federal spending received by state, 1981-2005, Oct. 19, 2007
Tax Foundation, Federal spending received per dollar of taxes paid by state, 2005, Oct. 9, 2007
Tax Foundation, Special report: Federal tax burdens and expenditures by state, March 2006
U.S. Census Bureau, Consolidated federal funds report for fiscal year 2009, issued August 2010
U.S. Census Bureau, Consolidated federal funds report for fiscal year 2008, issued July 2009
U.S. Census Bureau, Consolidated federal funds report for fiscal year 2007, issued September 2008
U.S. Census Bureau, Consolidated federal funds report for fiscal year 2006, revised September 2008
U.S. Census Bureau, Consolidated federal funds report for fiscal year, issued
Why do Red States vote Republican while Blue States pay the bills?, by Dean Lacy, presented at the Annual meeting of the American Political Science Association, Sept. 3-6, 2009
Tax Law Review, Rich states, poor states: Assessing the design and effect of a U.S. fiscal equalization regime, by Kirk Stark, 2010
Interview with Curtis Dubay, senior tax policy analyst, Heritage Foundation, April 18, 2011
Interview with Richard Morrison, manager of communications, Tax Foundation, April 18, 2011
E-mail interview with Dale Craymer, president, Texas Taxpayers and Research Association, April 18, 2011
Interview with Eva DeLuna Castro, senior budget analyst, Center for Public Policy Priorities, April 18, 2011
E-mail interview with Lauren Skowronski, director of media relations, MSNBC, April 19, 2011
E-mail interview with Dean Lacy, government professor, Dartmouth College, April 18, 2011
E-mail interview with Kirk Stark, law professor, University of California, Los Angeles, April 19, 2011
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