Tuesday, November 13, 2012

The Feasibility of Secession

Recently The Huffington Post reported on 34 states that had signed petitions to secede from the United States following Obama's reelection. 

Apart from the general silliness of the idea, the reasoning for why such a thing is feasible struck me. Consider the following from the Texas petition:
"Given that the state of Texas maintains a balanced budget and is the 15th largest economy in the world, it is practically feasible for Texas to withdraw from the union..."
Assuming a balanced budget and fiscal responsibility provides reason to secede (which it doesn't), let's see how all the offending states fare.

State Federal Spending per $1 Paid in Federal Taxes 


Alaska  $1.84
Louisiana  $1.78
West Virginia  $1.76
North Dakota  $1.68
Alabama  $1.66
South Dakota  $1.53
Kentucky  $1.51
Montana  $1.47
Arkansas  $1.41
Oklahoma  $1.36
South Carolina  $1.35
Missouri  $1.32
Tennessee  $1.27
Arizona  $1.19
Kansas  $1.12
Wyoming  $1.11
Nebraska  $1.10
North Carolina  $1.08
Pennsylvania  $1.07
Utah  $1.07
Indiana  $1.05
Ohio  $1.05
Georgia  $1.01
Florida  $0.97
Texas  $0.94
Oregon  $0.93
Michigan  $0.92
Colorado  $0.81
New York  $0.79
California  $0.78
Delaware  $0.77
Nevada  $0.65
New Jersey  $0.61
Average  $1.21
Red Average  $1.38
Blue Average  $0.85

This table is based on 2005 data from The Tax Foundation, so it may be a bit outdated, but I think the point still stands.

Essentially, if the dollar amount on the right exceeds $1, that state is taking more federal funding than it contributes through taxation. I've ordered the table from greatest takers to greatest givers, or to borrow recent Republican lingo, entitlement states to job creators.

I've also color-coded the states based on their electoral college vote in the 2012 presidential election -- red for Romney and blue for Obama. Not surprisingly, two-thirds of the secessionists went for Romney.

On average, these states take in $1.21 of federal funding for every $1 in tax revenue provided. However, the Democratic leaning states receive $0.85 of federal money on the dollar while the Republican leaning states receive $1.38. 

Texas is the only red state that's actually in the black, while Pennsylvania and Ohio (notable swing states) are the only blue states in the red.

The point: for all the states' rights and small government machismo, red states don't seem to have a problem cashing a federal government check. If I were most of these states, I'd think twice on this one. And Texas, best of luck. Third time's a charm.

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