As they each hand thousand of dollars to Uncle Sam today, taxpayers may console themselves that they're funding invaluable public goods. But if you live in or around the nation's capital, you see that federal tax dollars are also funding the prosperity and lavish growth of the Washington region.
The two richest counties in America, and five of the seven richest, are in commuting distance of the U.S. Capitol. Big government is the cause.
President Trump isn't the only developer betting on taxpayers' continued generosity. Walk through downtown D.C. and you will see construction cranes every few blocks, as the ballooning wealth of the region funds gleaming new office towers where the elites will work hard to siphon money from the provinces to themselves. For celebrity chefs, Washington is the place to open a new restaurant. Corporations more and more move their headquarters to Northern Virginia, to be on the tax-efficient doorstep of the taxing-and-spending federal city.
Whereas Detroit once made cars, Hollywood makes movies, and New York finances the economy, Washington mostly makes government.
How does big government enrich D.C. and its denizens? What's the mechanism? There are a few ways.
Most straightforwardly but not most importantly, federal salaries are high and the benefits even higher. The average federal employee makes $84,153, about 50 percent more than the average private-sector worker. Sweet benefits such as health insurance for life make the gap even wider. Government unions argue that federal workers are underpaid. Their arguments are self-serving hogwash based on bad data and excluding benefits.
A couple of mid-level managers living in Annandale, Va., and working at the Department of Housing and Urban Development can earn $200,000 and enjoy free parking.
But the real money comes when those bureaucrats cash out of government and pass through the revolving door into the private sector as consultants or lobbyists (though often still drawing a federal pension), monetizing their public sector experience to help clients win subsidies and game regulations.
Lobbying the federal government is a $3 billion-a-year business if you only count money reported on federal lobbying disclosure forms. The real tab is much higher and includes legions of consultants and quasi-lobbyists.
The government-dependent class is massive. Washington companies haul in more than $100 billion a year in federal contracts. The 32 largest contractors in the area accounted for 20 percent of all federal contracts in 2012.
It's not just spending. Every new regulation boosts the demand for compliance officers, lawyers, and lobbyists. Companies increasingly need offices in Washington to deal with Uncle Sam, or they hire a firm made of former Ways & Means Committee staffers, former Treasury Department officials, and former members of Congress.
This all imposes a dead-weight loss on the economy. But most of the country's loss is the Beltway's gain.
Home values have doubled since 2000 compared to a 35 percent increase in St. Louis and Milwaukee, to cite just two examples.
More federal spending means more wealth in the city that makes those decisions. More regulation also means more wealth there. A more complex tax code and higher tax rates means more and yet more.
The more businesses profit from federal contracts, bailouts, and regulatory arbitrage, the more swanky restaurants, opulent homes, and corporate headquarters Washington and its environs get.
If you file your federal taxes today, whether your payment goes to Cincinnati, San Francisco, or Charlotte, keep in mind that the money all ends up in Washington.
On behalf of a grateful metropolitan area, thank you.