Tennessee Doesn't Subsidize New Jersey — But It Might If Sen. Coburn Gets His Way

August 25, 2011 1:00 pm ET — Jamison Foser

Sen. Tom Coburn

Sen. Tom Coburn (R-OK) dislikes  an Army Corps of Engineers program that replenishes beaches: 

Republican Sen. Tom Coburn, who hails from the very landlocked state of Oklahoma, has tried to kill federal funds that shore up beaches time and time again, most recently in a deficit reduction plan he offered last month. He would like the entire burden of beach nourishment, which over the next 10 years would cost the federal government $700 million, shifted to cities and states.

"Why would taxpayers in Tennessee need to subsidize tourism in New Jersey, why not have New Jersey pay for that if it's a priority in New Jersey?" Coburn spokesman John Hart said.

Coburn's reason for opposing the program, as explained by his spokesman, may be more important than the opposition itself. In raising the specter of Tennessee taxpayers subsidizing New Jersey's tourism industry, Coburn's office is employing a favorite conservative trick: stoking resentment of coastal elites among hard-working middle Americans. And it's also peddling pure, unfiltered nonsense.

See, New Jersey is what's known as a "donor state" — it sends more tax money to the federal government than it gets back. In fact, according to a 2007 Tax Foundation analysis, New Jersey is the nation's single largest donor state, getting back only 61 cents in federal outlays for every dollar it sends to Washington. That means other states aren't subsidizing New Jersey — New Jersey is subsidizing other states. Like... Tennessee, which gets back $1.27 for each $1.00 in tax money it sends to the federal government. And, yes, Tennessee's tourism industry gets federal funding. (Coburn's home state, Oklahoma, relies even more heavily on New Jersey taxpayers, getting back $1.36 for every dollar it sends to D.C.)

So the claim from Coburn's office that Tennessee subsidizes New Jersey is complete bunk; the exact opposite is true. But there's more: One big reason why high-income states like New Jersey and New York and California get back less from the federal government than they provide in tax money, and states like Tennessee and Oklahoma get back more, has to do with the (somewhat) progressive nature of the tax system, in which higher incomes are taxed at higher rates. But Republicans like Tom Coburn want to make the tax system far less progressive, significantly increasing the tax burden on the poor and middle class in order to lower taxes for the rich. Coburn also wants to make programs like Medicare less progressive.

It's a central premise of much of Coburn's policy agenda (and that of the Republican Party): Take from the poor and give to the rich. And what happens if you apply that approach to Coburn's rhetoric about states subsidizing other states? Simple: Coburn's favored policy changes would shift money from Tennessee to New Jersey. His agenda would hurt the very people he panders to.