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1985 Memorandum on Allocation of the Federal Tax Burden and Federal Grants-in-Aid by State [1] (1985)

handle is hein.tera/mallocbufe0025 and id is 1 raw text is: MEMORANDUM ON THE ALLOCATION OF THE FEDERAL TAX BURDEN AND FEDERAL GRANTS-IN-AID BY STATE Fiscal Year 1984 This memorandum presents a state-by-state comparison of Federal tax burdens with Federal grants-in-aid to state and local governments for fiscal year 1984. The tax burdens in this comparison total $92,759.2 million for all states and reflect the cost of the Federal grants programs only; total Federal tax burdens in fiscal 1984 were $645,043 million. The tax burdens are estimates by the Tax Foundation, based on a special formula that measures the final geographic burden of taxes, as distinguished from the area of initial tax impact (the state from which the taxes are collected), as explained below. The data on grants-in-aid are derived from Federal Expenditures by State for Fiscal Year 1984, prepared by the Governments Division, Bureau of the Census, U.S. Department of Commerce. The Tax Foundation adjusts the U.S. total for Federal grants-in-aid, as shown in the Census report, by deducting figures for U.S. Territories, undistributed amounts, and for shared revenues, such as receipts from public lands and Federal payments in lieu of taxes on Federal lands. Tile 1984 Comparisons of Federal Tax Burdens and Federal Grants-in-Aid Table 1 presents the results of these comparisons for fiscal 1984. The cost of supporting grant programs fell on the residents of 19 states whose aggregate Federal tax burdens to support grant programs exceeded the am.nt of grants received by their respective state and local governments. As a whole, the 131 million residents of the paying states paid $53,838 million in Federal taxes to support grant programs while their state and local governments received $44,254 million in grants, an average Federal tax burden of $1.22 for each dollar of grants received. The 105 million residents of the other 31 states and the District of Columbia paid, on the average, 80 cents in Federal taxes for each dollar of aid received by their state and local governments--$38,922 million in Federal taxes for $48,506 million in Federal grants. It should be emphasized that these comparisons of Federal tax burdens for aid payments per $1.00 of assistance do not actually indicate the entire costs which state and local governments incur for obtaining Federal grants. The comparisons, with few exceptions, do not take into account the costs to these governments of administering the programs for which the aid is granted, nor the amounts of matching funds which the state and local governments must make available out of their own revenues in order to qualify as recipients of these grants. It is estimated that state and local governments provide about 43 cents of matching funds for each $1.00 of Federal aid.