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Sugar Daddy States Should Get First Primaries

Only 13 states are net contributors to the federal budget; why should they have to wait in line?

In the coming months, we're going to choose the two main candidates for president. But we still can't work out how.

The presidential primary calendar is in chaos. Every state, naturally, wants to vote as early as possible. But with no rules about who should go first and why, everyone is rushing the door at once.

It's a heck of a way to pick the most powerful person in the world.

So here's a radical idea. We still vote for president by state. So why don't we give first shout to the states that are actually paying the bills?

Contrary to what you may think, not all of them are equal contributors to the federal purse.

Most states, in fact, aren't even net contributors. They and their residents receive more federal spending each year than they pay in taxes. They're living on welfare.

Don't believe me? Ask the Tax Foundation, a nonpartisan think tank in Washington, D.C., that's been around since 1937. And every year it analyzes the federal budget and tax receipts to see who is paying in and who's taking out.

The most recent analysis - for 2004 -- makes for quite a read.

Just 13 states were net contributors to the federal government. Thirteen.

The Tax Foundation calls them "donor states," to differentiate them from the all the rest.

And out of those, seven paid nearly everything: New Jersey, California, Illinois, New York, Connecticut, Minnesota and Massachusetts. In that order. So why shouldn't they hold the first primaries?

They could be followed by the other six paying in: Nevada, Colorado, New Hampshire, Wisconsin, Michigan and Delaware.

"States with high levels of (personal) income will always pay more than thosestates with lower levels of income," says Tax Foundation economist Curtis Dubay. "High-income states like New Jersey, Connecticut, New York andMassachusetts will always be donor states that send more taxes to Washington than they receive back, and there is little hope this situation will ever change."

Why should any of these states have to wait in line to follow the likes of Iowa, South Carolina or Florida -- each of which is drawing out billions more than they pay in each year?

Iowa's deficit in 2004 was $3.8 billion. Not bad for a state of around 3 million people. Those farm subsidies sure pay well!

South Carolina's into Uncle Sam for 10 billion big ones a year, while the figure for Florida tops $15 billion.

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Meanwhile, New Jersey alone is a net contributor to the federal budget to the tune of $22 billion.

New Hampshire gets an honorable mention. The Granite State has held the "first in the nation" primary for half a century, but never used that clout to put the fix in.

Can you believe it? Per capita, Granite Staters are actually among the most responsible U.S. citizens, paying on average $1.50 in taxes for every buck they get back.

What's the matter with these guys? Where are the vast federal maple syrup subsidies that each presidential aspirant has to pledge to support? The Shaker Furniture Protection Act?

Don't they know how the game is played? Look at Iowa.

Two caveats.

The Tax Foundation's latest data come from 2004. (Ahern explains that the federal government hasn't issued more recent figures.)

Since then, the huge federal deficit has shrunk a bit, so a few other states are probably now net contributors as well. Washington state and Oregon are probably paying in, and maybe Indiana, Georgia and Texas as well.

You could also argue the numbers are a bit unfair to some states, like Florida, that have a lot of retirees from elsewhere. Their federal spending includes a lot of Social Security checks sent out each month.

But any reasonable primary calendar could adjust for this. And I'm not sure it matters that much anyway. Retirees certainly earned their money, but they're not the ones who'll be paying the rest of the country's bills today and tomorrow.

Only a small number of states are paying their keep. Giving them the early primaries could deliver two benefits.

One, it might encourage a few more states to pony up. Any state that wants to hold an early primary can get its wish. Just cut a check and cut in line.

Folks down south and out west are fond of shaking their fists against "big government" and all the welfare queens in places like California, New York and Massachusetts. What a wonderful opportunity for them to live up to their rhetoric. What a chance for all those Southerners and cowboys to get out of the cart and help the rest of us pull!

A second positive effect? If the states that actually pay the bills chose the government, maybe this would at last restore some fiscal sanity to Washington.

It's just an idea. Sure beats the current fiasco -- or letting the people of Iowa pick the next president because they did last time.

Repeat after me: "A strong America needs big corn ethanol subsidies."

In keeping with TSC's editorial policy, Brett Arends doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. Arends takes a critical look inside mutual funds and the personal finance industry in a twice-weekly column that ranges from investment advice for the general reader to the industry's latest scoop. Prior to joining in 2006, he worked for more than two years at the Boston Herald, where he revived the paper's well-known 'On State Street' finance column and was part of a team that won two SABEW awards in 2005. He had previously written for the Daily Telegraph and Daily Mail newspapers in London, the magazine Private Eye, and for Global Agenda, the official magazine of the World Economic Summit in Davos, Switzerland. Arends has also written a book on sports 'futures' betting.