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This report provides a comprehensive analysis of federal tax contributions across the U.S. and a detailed socio-economic profile of "Red Confederate States" (Alabama, Arkansas, Louisiana, Mississippi, South Carolina, Tennessee, and Texas).
The analysis of federal tax contributions highlights that while populous states like California, Texas, and New York generate significant gross revenue, the net fiscal flow reveals a different picture. New York, California, and New Jersey are major net positive contributors, sending more to the federal government than they receive. Conversely, several Red Confederate States, including Alabama, South Carolina, Mississippi, and Louisiana, are net recipients of federal funds.
For the identified Red Confederate States, the report reveals consistent socio-economic patterns:
  • Poverty Rates: All seven states exhibit poverty rates above the national average of 12.5%, with Louisiana (18.9%) and Mississippi (18.0%) having the highest.
  • Incarceration: These states generally have higher imprisonment rates than the national average (355 per 100,000 residents), with Mississippi (661) and Louisiana (596) leading. A significant racial disparity persists, with Black individuals disproportionately represented in prison populations; in Alabama, Louisiana, Mississippi, and South Carolina, over half of the prison population is Black, a stark contrast to the national Black population percentage.
  • Economic Output (GDP): There's a wide disparity in GDP among these states, ranging from Mississippi's $151,147 million to Texas's $2,583,866 million, reflecting diverse economic scales.
  • Key Industries: The economies vary from traditional agriculture and natural resources (e.g., Mississippi, parts of Louisiana) to increasingly diversified sectors like advanced manufacturing, aerospace, and technology (e.g., Texas, South Carolina, Alabama, Tennessee).
  • Median Household Income: Most Red Confederate States have median household incomes below the national average of $80,610, with Mississippi ($55,060) and Louisiana ($57,650) being the lowest, while Texas ($79,060) is closer to the national average.
The report concludes that while some Red Confederate States show robust economic growth and diversification, they continue to face challenges like higher poverty rates and significant racial disparities in their criminal justice systems. This "Southern Paradox" suggests that economic prosperity alone does not automatically translate into equitable social outcomes, and historical legacies continue to influence the well-being of their populations. Their fiscal reliance on federal funds also indicates a distinct approach to public finance.
A Comparative Analysis of Federal Tax Contributions and Socio-Economic Indicators in Red Confederate States
I. Executive Summary
This report provides a comprehensive, data-driven analysis examining U.S. states' fiscal contributions to the federal government and offering an in-depth socio-economic profile of a specific subset: states currently categorized as "red" (Republican-leaning) that were historically part of the Confederacy. The analysis reveals a nuanced fiscal relationship between states and the federal government, where top gross tax-collecting states are not always the primary net contributors. For the identified "Red Confederate States"—Alabama, Arkansas, Louisiana, Mississippi, South Carolina, Tennessee, and Texas—a consistent pattern of higher poverty rates and generally lower median household incomes compared to the national average is observed. These states also exhibit significant racial disparities in incarceration, reflecting enduring historical legacies. Economically, this group presents a diverse landscape, ranging from states heavily reliant on traditional agriculture and natural resources to those actively diversifying into advanced manufacturing and technology. The interplay between historical context, political alignment, and contemporary socio-economic outcomes is a central theme, indicating that persistent challenges in poverty and racial disparities are influenced by a complex web of historical, economic, and policy factors.
II. Introduction: Purpose and Scope of Analysis
This report aims to provide a comprehensive, data-driven comparative analysis of U.S. states. Its primary objective is twofold: first, to identify and compare which states contribute the most to federal taxes, offering a broad national context; and second, to deliver an in-depth socio-economic profile of a specific subset of states—those that are currently categorized as "red states" (Republican-leaning) and were historically part of the Confederacy. This analytical approach seeks to uncover patterns and relationships between political identity, historical context, and contemporary socio-economic indicators.
The identification of "Red Confederate States" involves a precise two-step process. First, the states that comprised the Confederate States of America during the Civil War are identified. These include Texas, Arkansas, Louisiana, Tennessee, Mississippi, Alabama, Georgia, Florida, South Carolina, North Carolina, and Virginia.1 Second, this historical list is cross-referenced with states identified as "red" (Republican-leaning) based on 2023 political data.3 This intersection precisely defines the specific group of states for the in-depth socio-economic analysis.
The data utilized in this report is derived from recent information provided by authoritative sources. Poverty and income data primarily stem from the U.S. Census Bureau (2023).4 Gross Domestic Product (GDP) figures are sourced from the Bureau of Economic Analysis (2023).8 Incarceration data, including total populations and ethnic compositions, are drawn from the Bureau of Justice Statistics and related organizations (2022/2023).10 Information on federal tax contributions is primarily from USAFacts.org (2023).27 The analysis of federal tax contributions encompasses all 50 U.S. states and the District of Columbia to provide a broad national context. The subsequent, more detailed socio-economic profiling, however, is exclusively focused on the identified "Red Confederate States," examining their poverty rates, total incarcerated populations and their ethnic compositions, Gross Domestic Product (GDP), dominant industries, and gross median household incomes.
III. Federal Tax Contributions Across the United States
In fiscal year 2023, the federal government collected approximately $4.67 trillion in revenue from states and their residents across the United States. A substantial portion of this total, exceeding 35%, originated from the four most populous states: California, contributing 12.2%; Texas, 8.9%; New York, 8.0%; and Florida, 6.7%.27 On a per-person basis, the average contribution to federal revenue nationwide was nearly $14,000.27
A critical observation in understanding which states contribute the most to federal taxes involves distinguishing between gross federal tax collections and net fiscal flows. While states with large economies and populations, such as California, New York, and Texas, generate significant gross federal tax revenue within their borders 29, a different picture emerges when considering the balance between taxes paid and federal funds received. For instance, New York, despite its high gross collections, was a substantial net positive contributor, sending approximately $89 billion more to the federal government than it received in 2023. Similarly, California and New Jersey also sent significantly more than they received, with net contributions of -$78 billion and -$70 billion, respectively.27 This indicates that these states are among the true net positive contributors to the federal system.
Conversely, some of the most populous states, including California, Texas, and Florida, become net recipients of federal funds when federal expenditures within their borders are accounted for.27 This complex fiscal dynamic highlights that a state's economic size does not directly correlate with its net financial contribution to the federal system; understanding this balance is crucial for comprehending inter-state fiscal relationships.
When examining per capita net contributions, Delaware stands out, sending $10,505 per person to the federal government, largely due to its high rates of business creation and associated business income taxes. Massachusetts ($7,605) and Minnesota ($7,456) also contributed high net totals per person, influenced by their high median incomes.27 In contrast, states like Alaska ($24,141 per person, with a quarter of this from Indian Health Service funding), Virginia ($22,085 per person), and New Mexico ($19,720 per person) received the most federal money per person in 2023.27 This demonstrates a varied reliance on federal funds across states, influenced by factors such as population, economic structure, and specific federal programs.
The following table provides a detailed overview of federal tax contributions, differentiating between gross collections and net fiscal flows, both in total and per capita terms.
Table 1: Federal Tax Contributions by State (FY 2023)
Note: Gross Federal Tax Collections data is for FY2020 as comprehensive FY2023 gross collections for all states were not explicitly provided in the available material. Net contribution data is for FY2023.
27
IV. Defining the Focus: Red Confederate States
To conduct a focused socio-economic analysis as requested, it is essential to precisely define the group of "Red Confederate States." This involves intersecting historical and contemporary political classifications.
For historical context, the Confederate States of America during the Civil War comprised eleven states that seceded from the Union. These were Texas, Arkansas, Louisiana, Tennessee, Mississippi, Alabama, Georgia, Florida, South Carolina, North Carolina, and Virginia.1 Jefferson Davis served as their President.1
In contemporary U.S. political discourse, "Red States" are those that consistently lean Republican in presidential elections and often have Republican majorities in state-level governance. Based on 2023 data, states firmly entrenched in the Republican camp include Alabama, Alaska, Arkansas, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, North Dakota, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, West Virginia, and Wyoming.3
By intersecting the historical Confederate states with the current (2023) "Red States" list, the following seven states are identified for the detailed socio-economic analysis: Alabama, Arkansas, Louisiana, Mississippi, South Carolina, Tennessee, and Texas.
This precise identification highlights a significant observation: historical identity as a Confederate state does not uniformly translate into a contemporary "red state" political alignment. While the seven identified states fit both criteria, other historical Confederate states, such as Georgia, Florida, North Carolina, and Virginia, are classified as "Swing State" or "Democrat" in the 2023 data.3 This demonstrates that the political landscape of the former Confederacy has evolved, with some states shifting towards swing-state status or even becoming reliably Democratic. This distinction is vital for accurate analysis, ensuring the report focuses on the precise group requested, rather than making broad generalizations about all former Confederate states. The identified "Red Confederate States" thus represent a more specific subset that has maintained a consistent Republican political identity since the Civil War era, allowing for a more targeted examination of their socio-economic characteristics.
V. Socio-Economic Profile of Red Confederate States
This section provides an in-depth socio-economic profile of the identified Red Confederate States, examining their poverty rates, incarceration trends, economic output, key industries, and median household incomes.
Poverty Rates and Affected Populations (2023)
In 2023, the overall U.S. poverty rate was 12.5%, encompassing 40.8 million Americans.4 The Red Confederate States consistently exhibit poverty rates above this national average, indicating persistent economic challenges within this region.
  • Louisiana: 18.9% (840,146 people) 4
  • Mississippi: 18.0% (512,184 people) 4
  • Arkansas: 15.7% (466,624 people) 4
  • Alabama: 15.6% (773,166 people) 4
  • Tennessee: 14.0% (978,460 people) 4
  • South Carolina: 13.9% (726,799 people) 4
  • Texas: 13.7% (4,086,851 people) 4

The consistent finding that all identified Red Confederate States have poverty rates exceeding the national average is a significant indicator of enduring economic challenges within this region. This pattern suggests that despite varying degrees of economic development and diversification, these states collectively struggle with a larger proportion of their populations living below the poverty line. This can be attributed to a combination of historical economic structures, such as the legacy of plantation economies and slower industrialization in certain areas, potentially lower educational attainment levels, and differing policy priorities regarding social safety nets or economic opportunity compared to other regions of the country.
Incarceration Landscape: Total Population and Ethnic Ratios (2022/2023)
Incarceration Trends in Red Confederate States
The U.S. prison population at year-end 2022 was 1,230,100, with state correctional authorities holding 1,039,500 persons. Many Red Confederate States experienced increases in their prison populations from 2021 to 2023, including Texas, Tennessee, Mississippi, Alabama, and Louisiana.
The imprisonment rates per 100,000 residents (2022/2023) for these states are:
  • Mississippi: 661
  • Louisiana: 596
  • Arkansas: 574
  • Texas: 452
  • Alabama: 390
  • Tennessee: 334
  • South Carolina: 302
The national average imprisonment rate at year-end 2022 was 355 per 100,000 U.S. residents. Several Red Confederate States, including Mississippi, Louisiana, and Arkansas, exhibit significantly higher overall incarceration rates than this national average.
Ethnic Composition of Incarcerated Populations
National estimates for sentenced state and federal prisoners at year-end 2022 were 32% Black, 31% White, 23% Hispanic, 2% American Indian or Alaska Native, and 1% Asian, Native Hawaiian, or Other Pacific Islander. For state prisons in 2023, the breakdown was 33.3% Black (Not Hispanic), 31.4% White (Not Hispanic), and 20.4% Hispanic.
Racial disparities in imprisonment rates are pronounced. Nationally, Black Americans are imprisoned at nearly 5 times the rate of white Americans. Within the Red Confederate States, the Black/White imprisonment rate disparities (2022/2023) are:
  • Louisiana: 3.8:1
  • South Carolina: 3.8:1
  • Arkansas: 3.5:1
  • Texas: 3.5:1
  • Tennessee: 3.4:1
  • Alabama: 2.8:1
  • Mississippi: 2.6:1
In several of these states—Alabama, Louisiana, Mississippi, and South Carolina—more than half of the prison population is Black, which is a stark contrast to the national percentage of Black individuals in the general U.S. population, which is approximately 13%.
Economic Output: Gross Domestic Product (GDP) (2023)
The total nominal Gross Domestic Product (GDP) at current prices for 2023 for the Red Confederate States varies significantly, reflecting diverse economic scales within the group:
  • Texas: $2,583,866 million 9
  • Tennessee: $523,032 million 9
  • South Carolina: $327,420 million 9
  • Louisiana: $314,989 million 9
  • Alabama: $304,936 million 9
  • Arkansas: $178,606 million 9
  • Mississippi: $151,147 million 9
The considerable disparity in total GDP among the Red Confederate States underscores that this group, despite sharing historical and political characteristics, is far from economically monolithic. Texas's economy, for instance, is an economic powerhouse, dwarfing that of Mississippi by orders of magnitude. This wide range in economic scale implies vastly different capacities for public investment, job creation, and addressing socio-economic challenges. It highlights that a shared political and historical identity does not necessarily translate into uniform economic development or prosperity, suggesting diverse internal economic dynamics and policy priorities within the region.
Key Industries and Economic Drivers
The industrial composition of the Red Confederate States reveals a spectrum of economic evolution, from traditional strengths to significant diversification efforts.
  • Alabama: While historically rooted in agriculture, Alabama's economy is strongly driven by Manufacturing, which is its largest employment sector.30 This includes significant contributions from the automotive industry, with major players like Mercedes-Benz, and the aerospace and aviation sectors, notably Airbus.31 Other key industries contributing to the state's economic fabric include Healthcare, Retail, Education, Hospitality, Construction, Government, and Professional Services, with a presence in Oil & Gas/Mining, Ag Tech & Food Products, Bioscience, and Metal & Advanced Materials.30
  • Arkansas: Agriculture remains a leading industry, particularly rice, with the state producing 49% of U.S. rice, and cotton.33 However, Arkansas has successfully diversified its economy. Aerospace & Defense stands as its number one export.33 Other significant sectors include Firearms & Ammunition, Food & Beverage (home to Tyson Foods) 34, Information Technology, Logistics & Distribution (leveraging its central location and companies like J.B. Hunt) 33, and Metals, boasting the nation's second-largest steel production capacity in Mississippi County.34
  • Louisiana: The state's economy is heavily influenced by Energy and Petrochemicals, serving as a national powerhouse in oil, gas, and refining, with major players such as ExxonMobil, Shell, and Valero.35 The Maritime and Ports Industry is also crucial, benefiting from extensive access to the Gulf of Mexico and the Mississippi River, with the Port of South Louisiana being one of the world's largest tonnage ports.35 Agriculture and Food Production, including rice, sugarcane, soybeans, crawfish, and seafood, remain foundational.35 Growing sectors encompass Manufacturing (including shipbuilding and chemicals), Healthcare & Biosciences, Technology & Digital Media, Tourism & Hospitality, and a prominent Film & Entertainment industry, often referred to as "Hollywood South".35
  • Mississippi: Mississippi's economy is predominantly agricultural and resource-based. Major commodities that drive its economy include Crops and Livestock/Dairy (notably soybean, cotton, corn, rice, and sweet potato), Poultry and Eggs, and Aquaculture (catfish and oysters).36 The state also holds reserves of Petroleum, Coal, Gas, Gravel Aggregate, and Clay.36 While manufacturing is present, it is generally less diversified compared to some of its neighboring states.
  • South Carolina: This state boasts a strong Advanced Manufacturing sector, with significant contributions from the Automotive industry (BMW, Volvo) and Aerospace (Boeing).37 Tourism and Hospitality is a cornerstone industry, generating substantial visitor spending.37 Other growing sectors include Technology and Software Development, Healthcare and Biotechnology, Logistics and Transportation (benefiting from strategic port operations), Agriculture and Agribusiness (including peaches, poultry, and timber), Financial Services, and Energy and Utilities.37
  • Tennessee: Key industries in Tennessee, particularly in its Middle Region, include Healthcare and Social Assistance, Retail Trade, and Manufacturing.38 The state is experiencing rapid growth in Transportation and Warehousing, Construction, Professional, Scientific, and Technical Services, Information, and Finance and Insurance. Electric Vehicle and battery manufacturing are identified as significant areas for future growth, contributing to skill requirements and employment.38
  • Texas: Texas possesses a highly diverse and robust economy. Energy, encompassing oil, gas, wind, and utility-scale solar, is a primary driver, with Texas being the leading producer in several of these categories.39 Advanced Manufacturing is strong, covering aerospace, automotive, electronics, and semiconductors.39 Agriculture, particularly cotton and cattle, remains a significant part of the economy.39 The service sector is large and growing, with strengths in Healthcare, Finance, Information Technology, Professional Services, and Tourism.39 Petroleum Refining & Chemicals and Transportation & Logistics are also major sectors, with Port Laredo being the top port in the country by trade volume.40
The industrial composition of the Red Confederate States reveals a spectrum of economic evolution. While some states, particularly Mississippi and parts of Louisiana, remain deeply rooted in traditional agriculture and natural resource extraction, which can contribute to economic vulnerability and limit high-wage job growth, others are actively pursuing or have successfully achieved significant diversification. States like Texas, South Carolina, Alabama, and Tennessee are increasingly driven by advanced manufacturing, technology, and a broader array of service industries. This divergence in economic strategy and industrial maturity likely plays a substantial role in the differing GDPs, median incomes, and overall economic resilience observed across this group.
Gross Median Household Income (2023)
The national median household income in 2023 was $80,610.6 The median household incomes for the Red Confederate States in 2023 are generally below this national figure, with Texas standing out as a notable exception:
  • Mississippi: $55,060 7
  • Louisiana: $57,650 7
  • Alabama: $60,660 7
  • Arkansas: $63,250 7
  • South Carolina: $69,100 7
  • North Carolina: $68,610 7
  • Tennessee: $72,700 7
  • Texas: $79,060 7
The consistently lower median household incomes across most Red Confederate States, with Texas being a significant outlier, directly reflect a disparity in economic prosperity compared to the national average. States like Mississippi and Louisiana, with the lowest median incomes in this group, face substantial challenges in providing a high quality of life and economic opportunity for their residents. This income gap is a critical indicator of the economic well-being of the population and often correlates with higher poverty rates, indicating systemic issues that impact household financial stability and overall regional development.
The following tables consolidate the key socio-economic indicators and incarceration data for the Red Confederate States, facilitating a direct comparison and highlighting patterns within the group.
Table 2: Key Socio-Economic Indicators for Red Confederate States (2023)
Table 3: Incarcerated Population and Ethnic Ratios in Red Confederate States (2022/2023)
Note: "N/A" indicates that a specific percentage for Black individuals in the state prison population was not explicitly available in the provided data for that state, though national and disparity ratios are given.
VI. Comparative Observations and Analysis
The detailed socio-economic profiling of the Red Confederate States reveals several interconnected patterns and complex dynamics.
A strong inverse relationship is evident between poverty and income: states with the highest poverty rates, such as Louisiana (18.9%) and Mississippi (18.0%), consistently record the lowest median household incomes within the Red Confederate group ($57,650 and $55,060, respectively).4 This suggests a reinforcing cycle where lower income levels contribute directly to higher poverty, limiting opportunities for economic mobility and investment in human capital.
Examining GDP in relation to social indicators presents a more complex picture. While Texas boasts a significantly higher GDP ($2,583,866 million) than other Red Confederate states, its poverty rate (13.7%) is still above the national average (12.5%).4 Furthermore, its incarceration rate (452 per 100k residents) is also higher than the national average (355 per 100k residents).11 This indicates that a large economic output alone does not automatically resolve underlying social challenges. Such a situation suggests potential issues with income distribution, where the benefits of economic growth may not be equitably shared across the population, or the persistent impact of specific state policies that do not adequately address poverty or criminal justice reform. Conversely, states with lower GDPs, such as Mississippi ($151,147 million) and Arkansas ($178,606 million), generally exhibit higher poverty and incarceration rates, pointing to a correlation between overall economic scale and broader social well-being.
The disproportionate incarceration of Black individuals is a pervasive issue across many of these states, highlighting the enduring legacy of racial inequality stemming from the Confederate era. The fact that Alabama, Louisiana, Mississippi, and South Carolina have prison populations where more than half of the inmates are Black 13 is a powerful indicator of systemic issues within the criminal justice system that transcend current economic performance. This overrepresentation, especially when compared to the national proportion of Black individuals in the general population, suggests that historical injustices continue to manifest in contemporary social outcomes, demanding targeted interventions beyond purely economic development.
Economic diversification efforts appear to correlate with greater prosperity within the Red Confederate group. States that have successfully diversified their economies beyond traditional agriculture and resource extraction into advanced manufacturing, technology, and a broader range of services (e.g., Texas, South Carolina, Tennessee) generally demonstrate higher GDPs and median incomes within the Red Confederate group. This suggests that shifting towards higher-value industries is a key pathway to greater prosperity and resilience, potentially offering a route to address some of the persistent socio-economic challenges observed in the region.
The data points to a complex "Southern Paradox" within the Red Confederate States. While some states, particularly Texas, South Carolina, and Tennessee, demonstrate robust economic growth, significant GDPs, and successful diversification into modern industries, they continue to grapple with persistent socio-economic challenges such as higher-than-average poverty rates and profound racial disparities in their criminal justice systems. This suggests that economic prosperity, while vital, does not automatically translate into equitable social outcomes, and that historical legacies and structural inequalities continue to exert a powerful influence on the well-being of their populations. This highlights the need for a holistic approach that addresses both economic development and social equity to foster comprehensive progress.
The fiscal relationship with the federal government, where several Red Confederate States are net recipients of federal funds, carries significant policy implications. For instance, Alabama, South Carolina, Mississippi, and Louisiana receive more from the federal government than their residents pay in federal taxes.27 This reliance on federal disbursements, potentially coupled with lower state-level tax burdens (as indicated for Alabama, Tennessee, and Mississippi, which have among the lowest state and local tax collections per capita) 42, suggests a distinct approach to public finance and resource allocation compared to net-contributing states. This dynamic could influence the capacity of these states to independently fund social programs, education, and infrastructure, thereby indirectly affecting poverty rates and other socio-economic indicators. It also raises questions about the long-term sustainability of such fiscal models and their impact on self-sufficiency and the ability to address internal challenges without substantial external support.
VII. Conclusion
This report has provided a detailed comparative analysis of federal tax contributions and a socio-economic profile of the Red Confederate States. The examination of federal tax flows revealed a critical distinction between gross collections and net contributions, illustrating that populous states, while generating significant gross revenue, are not always net contributors to the federal system. Instead, states like New York, California, and New Jersey emerge as major net positive contributors, while several Red Confederate States are net recipients of federal funds.
The in-depth socio-economic profiling of Alabama, Arkansas, Louisiana, Mississippi, South Carolina, Tennessee, and Texas highlighted several consistent patterns. These states generally exhibit poverty rates above the national average and lower median household incomes, with Louisiana and Mississippi facing the most significant economic disadvantages. A pervasive issue across this group is the pronounced racial disparity in incarceration, with Black individuals being disproportionately represented in prison populations, particularly in Alabama, Louisiana, Mississippi, and South Carolina. This enduring overrepresentation underscores the powerful and persistent influence of historical legacies of racial inequality on contemporary criminal justice outcomes.
Economically, the Red Confederate States present a varied picture. While some, like Mississippi and parts of Louisiana, remain heavily reliant on traditional agricultural and resource extraction sectors, others, such as Texas, South Carolina, and Tennessee, have achieved significant diversification into advanced manufacturing, technology, and a broader range of service industries. This economic evolution appears to correlate with higher GDPs and median incomes within the group, suggesting a pathway towards greater prosperity.
The coexistence of economic growth and persistent social challenges within these states—a phenomenon termed the "Southern Paradox"—indicates that economic development alone does not automatically translate into equitable social outcomes. Historical structures and systemic inequalities continue to exert a powerful influence on the well-being of their populations. Furthermore, the fiscal reliance of several Red Confederate States on federal funds suggests a distinct approach to public finance that may impact their capacity for independent investment in social programs and infrastructure.
Future research could delve deeper into the specific state-level policies on taxation, social welfare, and criminal justice reform to understand their influence on these socio-economic indicators. Understanding how these policies interact with historical contexts and economic development strategies is crucial for fostering comprehensive progress and addressing the systemic disparities that continue to affect the populations within these states. The ongoing need to promote equitable development across all segments of the population remains a paramount consideration for the region.
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