That's a bit oversimplified.

Red states are currently growing because people are moving out of blue states in large numbers for the economic opportunity and lower cost of living.

I think bracket creep and farm subsidies tell some of the story that you're discussing. Because the cost of living is lower, nominal wages are lower which means more people qualify for federal programs and they pay lower income tax rates. Some of the lower cost of living is due to lower productivity, but some of it is also just the lower tax and regulatory burdens faced by producers.