Comment by fred_is_fred
Comment by fred_is_fred 13 hours ago
We do the same here in the US for Mississippi, Arkansas, and other states and they only get worse - at least Poland has a path out here.
Comment by fred_is_fred 13 hours ago
We do the same here in the US for Mississippi, Arkansas, and other states and they only get worse - at least Poland has a path out here.
The net per capita amount we get is dropping every year - mostly by the fact the contributions are rising fast.
Might be worth adding that US comparisons aren't quite relevant. Poland is a relatively new member-country, not an existing state within a long standing union.
The Polish economy and success is simply the result of disciplined economic decisions and hard work. Apart from few political turbulences and ongoing constitutional crises we've managed to spend all the investment correctly. An enormous and matter-of-fact win-win.
Federal support for disadvantaged states is different (though really shouldn't be).
There is no federal support for disadvantaged states in the sense we are talking about with the EU. You’re referring to the fact that federal taxation is progressive, so states with more rich people carry a larger share of the federal tax burden than states with fewer rich people. You can think of that as a form of subsidy, but it’s really just how progressive taxation works. The alternative would be a system where the federal tax burden is apportioned based on population, which is what the constitution required before the 16th amendment.
The EU system is totally different. About a third of the EU budget is allocated to reducing economic disparities between member states. The U.S. doesn’t have anything like that.
Most other federations have formal mechanisms for ensuring fiscal equity between their federal constituents – Australia has the Commonwealth Grants Commission, Canada has its Equalization Program, Germany has the Länderfinanzausgleich, Switzerland has Nationaler Finanzausgleich, Brazil has the Fundo de Participação dos Estados, Mexico has Participaciones Federales, Argentina has the Régimen de Coparticipación Federal de Impuestos; the UK is a devolved unitary state not a federation, but it has the Barnett formula – the United States is unusual in being a federation without formal fiscal equity mechanisms, although its informal mechanisms (progressive taxation, social security, welfare, Medicare/Medicaid, Congressional earmarks and pork-barrelling, etc) end up achieving much the same end with less transparency in the process.
And I don't know why people keep on comparing the US and the EU. One is a federal nation, the other is a supranational entity. Other nations with federal systems–Canada, Mexico, Australia, Germany, Switzerland, Argentina, Brazil–are better comparators–comparing an apple with (smaller) apples instead of with an orange.
We don’t have any similar program in the U.S. You seem to be talking about the fact that some states pay a larger share of the federal tax burden. That’s just a consequence of progressive taxation and those states having more rich people.
In terms of federal grants to states on a per-capita basis, Mississippi gets less than California, and a bit more than Massachusetts: https://ffis.org/wp-content/uploads/2024/10/SA24-02-1.pdf. Some of the states with very high grants relative to population are states that have a lot of natural resources and get federal lease payments and things like that.
Also, the gap between richer states and poorer states has closed dramatically. In 1950, the nominal per capita personal income in New York was 2.4 times higher than Mississippi. Today’s it’s about 60% higher. Adjusted for cost of living, incomes in New York today are only about 11% higher today: https://flowingdata.com/2021/03/25/income-in-each-state-adju...