The LuLac Edition #5, 508, November 26th, 2025

 

WRITE ON WEDNESDAY

Our “Write On Wednesday” logo

This week we feature an article about red and blue states. It is apparent that blue states are demonized for their beliefs and ideology while red states are celebrated by 

GOP as the “real America”. That claim is debunked at least in this article.

 

DO DEMOCRATIC STATES SUBSIDIZE REPUBLICAN ONES? THE NUMBERS SAY YES

 

Do states with Democratic governors “subsidize” states with Republican governors? That claim circulated widely last summer during the run-up to the federal budget vote — the idea that Democratic-led states pay more in federal taxes than they receive in federal benefits, and the reverse is true for Republican-led states.

The assertion resurfaced during the recent government shutdown, amid federal layoffs, Affordable Care Act subsidies, and questions about how federal contracts are distributed across red and blue states.

Little evidence has been offered to test the claim, so I decided to examine it. I compiled data from multiple sources, including IRS tax and benefit figures, poverty rates from the Department of Health and Human Services, and publicly available population and age statistics. I compared the data across states with Democratic or Republican governors and across states that voted for Donald Trump or Kamala Harris in the 2024 election. I also ran regressions to determine which variables best predict the differences. (The data can be shared with anyone who wants to explore them further.)

The short answer: Yes — states with Democratic governors send far more to Washington than they get back, while states with Republican governors receive more than they pay.

—The 23 states with Democratic governors pay an average of $10.35 billion more in federal taxes than they receive in federal benefits.

—The 27 states with Republican governors receive an average of $4.40 billion more in federal benefits than they pay.

The pattern is even more evident when comparing presidential vote outcomes:

Fiscal Imbalance

Democratic-led states subsidize Republican ones, paying $10.35 billion more than they receive in benefits.

Republican-led states gain $4.40 billion more from federal benefits than they pay in taxes.

Data shows Republican states are poorer and younger than Democratic states, affecting federal benefits.

How do states compare in federal taxes?

—The 19 states that voted for Harris pay an average of $13.38 billion more than they receive.

—The 31 states that voted for Trump received an average of $4.36 billion more than they paid.

Does this imbalance exist because Democratic-led states are more prosperous or more populous? Or because Republican-led states are older and receive more Social Security and Medicare benefits? Here’s what the analysis found:

—Population matters — but politics doesn’t.

More populous states pay more in federal taxes than they receive in benefits, regardless of the governor or voting patterns. Florida, Ohio and Texas — all Republican-led — pay more than they receive, while Democratic-led Hawaii, Maine and New Mexico receive more than they pay.

A state’s poverty rate and average age had no statistically significant effect on whether it paid more to the federal government than it received.

—Trump-voting states tend to be poorer and younger.

States that voted for Trump were, on average, poorer and younger than states that voted for Harris, regardless of the governor’s party.

Does any of this matter beyond political “gotcha” arguments? Isn’t the federal system supposed to spread resources over time?

In theory, yes. However, because more populous states reliably pay more than they receive — and because the U.S. population has never been evenly distributed — these imbalances will not simply even out.

Why higher-population states tend to elect Democratic governors is a deeper question, but the reality is apparent: Democratic-led states disproportionately subsidize Republican-led ones.

That matters. If federal policies or executive actions significantly weaken the economies of Democratic-led states — regardless of political intent — then less federal revenue will be available to support the programs that disproportionately benefit Republican-led and Trump-voting states. The effects would ripple across the entire country.

When it comes to the national economy, we are not a loose confederation of independent states. The United States is an interconnected ecosystem. States rely on one another financially, economically and socially. Whether we like the politics or not, the data show that the health of Democratic-led states directly affects the resources available to Republican-led ones — and vice versa.

Understanding that interdependence is essential if we want fiscal debates grounded in reality rather than rhetoric.

Aaron Brower is a retired University of Wisconsin-Madison professor and administrator. He wrote this for InsideSources.com.

Aaron Brower is a retired University of Wisconsin-Madison professor and administrator. He wrote this for InsideSources.com.