Eleven US States Have More Government Takers Than Private Sector Makers

Makers-and-Takers

I know, I know. We’re not supposed to talk about the “47%.” But how can this be anything but an alarming statistic indicative of a nation that is, increasingly, placing far too little value on individualism and self-reliance?

Eleven states, including California, have more residents who draw money from the government—as employees, pensioners, or welfare recipients—than people employed in the private sector. This means that roughly one-third of Americans live in states where more people receive tax dollars than pay taxes on non-government income.

“Most of these states’ preferred solution to fiscal woes has been to raise taxes on the dwindling number of rich residents,” writes Walter Russell Mead at the link. “Attempting to raise more and more money from a shrinking subset of the population is setting these states up for serious trouble in the near future.”

That seems to be exactly what’s happening in California, where tax hikes on the rich have resulted in dropping revenues (via the headlines).

California State Controller John Chiang has announced that total state revenue for the month of November 2012 fell $806.8 million, or 10.8%, below budget.

Democrats thought they could hammer “the rich” by convincing voters to pass Proposition 30 to create the highest state income tax in the nation. But it now appears that high income earners have already “voted with their feet” by moving themselves and their businesses out of state, resulting in over $1 billion shortfall in corporate and income taxes last month and the beginning of a new financial crisis.

Meanwhile, at the national level, we’re supposed to believe that immediate tax hikes on the wealthiest Americans (coupled with relatively minor spending cuts spread out over the course of a decade) are the solution for our fiscal crisis. But those tax hikes, much like they have in California, will only inspire “the rich” to invest and spend less, which will hurt our economy and overall tax revenues.

The best way to lift America out of this fiscal crisis, and economic malaise, is smaller government (including fewer citizens on the take) and fewer restrictions on economic activity.

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Rob Port is the editor of SayAnythingBlog.com. In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters. He writes a weekly column for several North Dakota newspapers, and also serves as a policy fellow for the North Dakota Policy Council.

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