Like it or not, the Occupy movement has turned a lot of the nation’s attention to the subject of “income inequality.” Occupy protesters around the country have labeled themselves the 99 percent, in contrast to the wealthiest 1 percent.
While this has captured the public’s attention, differences in wealth have always existed, and some states have tried to address this by redistributing money through education spending, unemployment benefits, health care, welfare, and other means.
Incidentally, and this is important to note, the states that are most generous with money and benefits also tend to have the highest costs of living, the biggest tax burdens, and/or the greatest “income inequality” (as measured by the Gini coefficient).
Average pension benefits: $24,398
Total per pupil spending: $9,657
Medicaid payments per beneficiary: $3,367
Pct. of weekly wages covered by unemployment benefits: 30.3 percent
No. of months of TANF received: 42.4
Avg. TANF cash assistance per month: $537
California provides a large amount of cash assistance to the needy. Recipients of Temporary Assistance for Needy Families in the state receive $537 per month—the second largest amount in the country—and for 42.4 months—the 7th most months. California residents have one of the highest tax burdens in the country.
Average pension benefits: $16,304
Total per pupil spending: $11,098
Medicaid payments per beneficiary: $8,435
Pct. of weekly wages covered by unemployment benefits: 40.7 percent
No. of months of TANF received: 40
Avg. TANF cash assistance per month: $348
As of 2008, Medicaid enrollees in Minnesota received the second largest amount in benefits in the country. However, the state has cut outlay to the program as stated in the 2012-2013 budget, meaning the state’s ranking in this category may soon change. Residents of the state have to pay a very large amount in taxes. The average citizen of Minnesota pays 10.3 percent of their income in state and local taxes, which is the seventh largest amount in the country.
Average pension benefits: $18,632
Total per pupil spending: $15,552
Medicaid payments per beneficiary: $7,453
Pct. of weekly wages covered by unemployment benefits: 27.0 percent
No. of months of TANF received: 37.3
Avg. TANF cash assistance per month: $602
Alaskans have the lowest tax burden in the country, paying just 6.3 percent of their income in state and local taxes. According to the Tax Foundation, “Before the Trans-Alaska pipeline was finished in 1977, taxpayers in Alaska bore the second-highest tax burden in the country. By 1980, with oil tax revenue pouring in, Alaska repealed its personal income tax and started sending out checks instead.”
Tax burden refers to the average amount a person pays in taxes as a percentage of his income. The Tax Foundation calculates each state’s tax burden by taking the total amount paid by the state’s residents in taxes, and dividing it by the total income of the state’s residents.
Average pension benefits: $26,622
Total per pupil spending: $14,531
Medicaid payments per beneficiary: $7,442
Pct. of weekly wages covered by unemployment benefits: 29.2 percent
No. of months of TANF received: 26.7
Avg. TANF cash assistance per month: $413
Connecticut has the highest per capita income in the country. Its residents also pay more than $5,000 a year on average in state and local taxes—the highest amount in the U.S. As a result, residents have the third highest tax burden in the country.
In return, Connecticuters receive above average benefits. State employees who receive their pensions through the Connecticut State Employees Retirement System have the fourth highest average pension benefits. Students have the sixth highest amount spent on them. The state also has the fourth highest cost of living, and the second highest rate of “income inequality.”