Re:US Federal Reserve raises interest rates for first time s...
by ryathal on Thursday March 17, 2022 @10:10AM
(#30711339)
A state being a net contributor generally means they have a lot of high paying jobs and successful companies concentrated in their state. Michigan is actually a good example as you can see when the big 3 auto companies were at their peak the state was a net contributor, but it has been a receiver since their decline.
https://worldpopulationreview.com/state-rankings/donor-state...
California is a net recipient of federal money (though not by a lot). The biggest donors are the blue states in the northeast. But plenty of blue states are recipients and the biggest recipients are the swing states, because politicians shamelessly buy their votes.
And the reason the states in the northeast pay the most isn't because of state-level benefits reducing the need for federal programs (which rarely if ever happens). It's because those states are disproportionately the wealthy people who pay the most taxes.
But getting rid of the SALT deduction didn't care about that. Wealthy people in California lost more than equally wealthy people in New Hampshire, even though California is a net recipient and New Hampshire is a net donor, because New Hampshire has lower state and local taxes.