Even the most liberal residents of New Jersey should have grave concerns with the stimulus payments currently under consideration. Why? Because of “red-state welfare.”
“Red-state welfare” is the phenomenon whereby Republican states—despite ostensibly being opposed to government handouts—receive more in federal benefits than they pay in taxes, at the expense of the liberal blue states.
New Jersey residents bear a disproportionate responsibility for any federal spending, including the stimulus payment, because we simply pay more in taxes than folks from red states. Our share of federal taxes averages out to $13,000 per person, while in deep red Mississippi, that number is under $6,000 per person.
Our “return on investment” for taxes is also much lower than red states’. By one analysis, Mississippi receives back $2.18 for every $1.00 paid in federal taxes by its residents. New Jersey? $0.76.
New Jersey residents pay too much in taxes as it is, without subsidizing welfare benefits for other states.
Not only that, but our cost of living in New Jersey is far higher than the cost of living in traditionally red states, roughly 50% higher than Mississippi’s. A family would have to earn $100,000 in New Jersey to achieve the same standard of living as someone making $70,000 in Mississippi.
So, when it comes to stimulus, New Jersey is getting the short end of the stick. We are paying far more for the stimulus checks than other states, and when New Jerseyans get the checks, the money does not go nearly as far as it would in redder states. While New Jersey and Mississippi residents receive the same amount of stimulus in raw dollar amounts, New Jersey families would need a $1,500 check to get the same amount of aid as a Mississippi family getting a $1,000 check.
But that’s not all: people in New Jersey have a higher bar to clear to qualify for a check. Earning $70,000 in Mississippi is the same as earning $100,000 in New Jersey, yet someone earning $70,000 in Mississippi would qualify for the full stimulus, while someone earning $100,000 in New Jersey would not.
New Jersey residents should be the prime beneficiary of New Jersey’s taxes. Instead, a clunky federal approach effectively taxes struggling families here to provide a windfall to residents of other states.
Any approach Congress could take will inherently be less tailored to the needs of the individual states than what the states could do themselves.
What could New Jersey do for its own residents if the rest of the states weren’t distributing our money as if it were their own?
More than almost any other state, New Jersey needs a constitutional amendment limiting the size and scope of the federal government and restricting its taxing and spending power. To learn more about how we can take back decision-making power over own money, and ensure our state is no longer taken advantage of by the current system, visit conventionofstates.com.