In Short: Here's a Very Interesting Little Tax Fact - You'll Never Guess Where the Money Goes...

[Jason Taylor]

Ok, most everyone knows that the Federal Government collects on taxes on much more than just your income, right?

And I'm sure that most people know that the Federal Government financially sponsors all sorts of funding for projects in all of the States. On top of spending money on a particular State's federal welfare recipients, there is a ton of money spent on other things such as road work, all sorts of grants, Border Patrol, federal offices and employees, etc.

Can you guess the total percent of all Federal taxes charged to Michigan citizens that is ultimately re-spent in the State of Michigan?

First prize: the admiration of your peers. :)

***************************************

The answer? 92%.

Hard to believe, isn't it? Almost all of the money collected by the Federal Government from the citizens of Michigan actually is spent within the State of Michigan. This isn't a unique circumstance, either; Michigan is somewhere in the middle of the pack in this category. In fact, many States receive Federal spending well in excess of 100% of their citizens' Federal tax burden. The lowest I remember seeing was something like 62%.

Now, keep in mind that this does include some programs that benefit far more US citizens than reside in the States where the money is spent. But still, doesn't it seem silly to send so much money to the Federal government just to have them send it back to our State governments? Why wouldn't they just have the States collect, keep, and spend the money themselves?

The answer, my friends, is power. By collecting the money at the Federal level, they can take a slice off the top for operating expenses, and then make the powerful decisions regarding who is "most worthy" of receiving your money.

I'm going to look into this much deeper - I actually have an economist from the non-profit Tax Institute in Washington DC calling me on Monday to discuss this very topic. However, even at first glance I think that there is a case to be made for the release of many Federal programs back to the States. After all, if you're paying for these programs anyway, don't you think you should have a greater say in how they are run?

[Whitehorse (Robin Ray)]

It's going to take some education, for sure. What many people forget is that it's not the government takins a dollar & giving a dollar to someone else - it's the government taking a dollar, spending fifty cents on unnecessary bureaucracy, & then doling out the remaining fifty cents.

[Young Jeffersonian Republican]

I agree with Brian and Chris, those are some astounding and consequential statistics if this country just recognizes what is truly occurring...

[Chris Lawley]

Jason - That's great! The Federal Government as the "middle man".