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What happens when the red states run out of money? You know, Republican led states love to talk about low taxes and small government and fiscal responsibility. And it all sounds great, right? I mean, keep more of your money, attract businesses, live free and all of this stuff. There is one little problem with it, which is that cutting taxes means cutting revenue. And when the money runs out, who is going to pay the price? Turns out it's not just red states, it's all of us. Especially us in the blue states. Because when red states slash taxes and struggle to fund basics like schools and roads, they are quietly being propped up by us in the blue states. States like Texas and Florida and Tennessee, you know, they brag about there's no state income tax and it's so cheap to live here. And it sounds awesome until you realize that they still need to pay for stuff.
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How do they do it? Well, they shift the burden. Instead of income tax, they rely on sales taxes and property taxes and car registration fees. And on a percentage level, these hit low and middle income families the hardest. For example, Texas has some of the highest property taxes in the country. Instead of a progressive state income tax, which disproportionately hits the wealthy, you've got a property taxes that as a share of the household budget are way more expensive for low income Texans than they are for high income Texans. You look at Florida. Florida leans on a sales tax which takes a bigger chunk of income from poor people than from the wealthy as a share of their total household budget. So, you know, the no income tax slogan sounds okay sometimes, but it's really a shell game because the money's got to come from somewhere and usually it comes from those who can least afford it.
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This brings us to the state of Kansas in 2012. We covered it at the time. Governor Sam Brownback, a Republican, went all in on tax cuts, slashed income taxes and said that. Said the same thing as Trump. This will boost the economy so much that we're going to do awesome. And instead, the state got a fiscal disaster. Revenue crashed, schools were gutted, roads fell apart, and by 2017, even Republicans had enough. And they said, we're going to roll back these tax cuts. Kansas is the prototypical cautionary tale in this entire thing. You cut taxes too much, you can't pay for basics. And Kansas is not alone. States like Oklahoma and Louisiana have faced similar crises. The budget shortfalls lead to cuts in education and health care and infrastructure. Those cuts make the state less competitive. People are less able to get themselves good jobs. The economy is weaker, quality of life Goes down for everybody.
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It's really a vicious circle. And the sick irony is that many of these red states rely on federal money to stay afloat. That means that taxpayers in blue states like California and New York are subsidizing the red states. And if you look at the Rockefeller Institute of government, states like Mississippi, Kentucky, Alabama, they get way more in federal funds than they pay in federal taxes. They are taking more than they give. And it's so ironic given that red states criticize blue states and they go big government taxes too high. But they are the ones depending on that big government to fund their budgets. It's like cutting off a branch that you're sitting on and then asking someone to hold you up and go, we don't need these branches taking up space. Well, someone's holding you up. And the consequences of the low tax policies don't disappear.
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When the schools are no good and the education worsens, it's worse for the state over the long term. Businesses and families don't just move to a state for low taxes. They want good schools, they want safe roads, they want reliable services. That's why when Sarah Huckabee Sanders says Arkansas is the best place to move to because it's so cheap, it's cheap partially because there's no demand. I'm so sorry to say it to people who live in Arkansas. If red states can't provide basics, the low taxes and low cost of living don't really look that good. So it's another example of how low taxes sound great, in theory, I'd love to keep more of my money. Why not? But then you see that red states can't pay the cost. They turn to the federal government and by extension, they're turning to me. They are turning to taxpayers in blue states to bail them out.
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