MS receives more than its fair share of federal taxes


Mississippi Governor Tate Reeves speaks to the press during a drug crime news conference at the offices of the Mississippi Bureau of Investigation in Biloxi on Wednesday, May 11, 2022.

Mississippi Governor Tate Reeves speaks to the press during a drug crime news conference at the offices of the Mississippi Bureau of Investigation in Biloxi on Wednesday, May 11, 2022.

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Governor Tate Reeves recently took to social media to ask “why does the Democratic Party hate working people so much” after President Joe Biden announced his limited student loan forgiveness program.

The first-term governor assumed that tax money from working Mississippians would be used to pay off student loans taken out by “Harvard Ph.D. gender studies majorities living in California.”

People earning less than $125,000 or $250,000 for a family can have $10,000 of their student loan forgiven under the Biden plan. People who receive Pell Fellowships (which provide financial aid to the needy for undergraduate studies, not Harvard doctoral degrees) can get up to $20,000 forgiven.

People who attended college but dropped out, perhaps due to financial hardship, can take advantage of loan forgiveness. These people are certainly not Harvard elites and are likely the workers the governor cited as being treated unfairly by loan forgiveness.

Still, the governor makes a good point.

As part of our system of government at the local, state, and federal levels, people pay taxes for what is considered the highest good of government and society.

People who don’t have children in public schools pay taxes because it’s a benefit to society to have a good education system. People pay taxes for restaurant inspections whether they eat out or not.

The list could be extended to services that taxpayers pay for, whether they use them or not.

Mississippi workers are also paying their taxes for the Medicaid expansion. But because the governor adamantly refuses to allow the state to expand Medicaid, Mississippi taxpayers’ money goes to the 38 other states that have expanded Medicaid to provide health insurance primarily to the working poor.

Taxpayer money from working Mississippians will also help pay for housing assistance in other states as the governor ends state participation in an emergency rental assistance program designed to help the poor and those affected by the COVID-19 pandemic. The governor will return more than $100 million in rental assistance funds to the federal government.

But neither Reeves nor anyone else should be too concerned about Mississippi taxpayers subsidizing people in other states — those Harvard elites or anyone else. By several measures, Mississippi is the recipient of federal taxpayers’ money, not the grantmaker.

Mississippi ranks sixth nationally in federal spending per capita at $6,880, according to a 2022 study. Virginia, home to a large percentage of the federal workforce, ranks first with 10 $301 per capita, followed by Kentucky, New Mexico, West Virginia and Alaska.

New Jersey is last in federal spending per capita at minus $2,368, followed by Massachusetts at minus $2,343. California, the state where Reeves feared Mississippi taxpayer money was going to Harvard elites, garners less than $12 in federal spending for every resident.

Using a different metric — the return on taxpayer dollars — Mississippi receives $3.40 for every tax dollar sent to the federal government, according to a 2020 report. In this study, Mississippi tracks only the New -Mexico, which receives $4.33 for every dollar it sends to the federal government, and West Virginia, which collects $3.74 for every dollar it directs to the federal government.

New Jersey receives 78 cents for every dollar its residents pay in federal taxes. Other states that receive less than a dollar for every dollar sent to DC are Nebraska, Washington, Minnesota, and Illinois.

Mississippi receives more federal spending than most states, in part because it has the highest percentage of people living in poverty and eligible for various federal programs. Mississippi also has several federal military bases. Many, but not all, state farmers are also big winners in terms of federal subsidies.

The taxation system is set up to send funds to programs that political leaders deem good for the good of the nation, state or local government. Much of the country’s political discourse revolves around what these programs should and shouldn’t do.

But regardless of that talk, Mississippi has been and will continue to be a winner when it comes to the federal government providing taxpayers’ money to the state despite the Biden student loan forgiveness program.

If Reeves really wants to stick with those other states and elites by raising more of their taxes, all he has to do is expand Medicaid.

The move would provide Mississippi with about $1 billion a year in additional federal taxes.

This analysis was produced by Mississippi Today, a nonprofit news organization that covers state government, public policy, politics and culture. Bobby Harrison is the senior reporter for Mississippi Today’s Capitol.


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