A study by a University of Michigan researcher has confirmed what we already knew: City residents pay more taxes.
“Workers in expensive cities in the Northeast, Great Lakes and Pacific regions bear a disproportionate share of the federal tax burden, effectively paying 27 percent more in federal income taxes than workers with similar skills in a small city or rural area,” according to The Atlantic.
The study asserts that city residents have higher incomes than their rural counterparts, but also contend with higher cost of living. This holds for not only pricey cities like L.A. and New York, but also Detroit.
“With its high wage levels, Detroit was, until recently, contributing far more in federal revenues per capita than most other places for over one hundred years,” David Albouy writes in The Journal of Political Economy. The recent federal bailout to Detroit automakers “is peanuts relative to the extra billions the city has poured into Washington over the 20th Century.”
That’s not likely to change soon, he writes, because populous states have less elected representatives in Washington per capita than less-populated states.