6th Edition of Rich States, Poor States Shows Continued Success of States Embracing Low Taxes, Free Markets and Limited Government
State policymakers looking for lessons and best practices to boost their state’s income and job growth have a new tool at their disposal as the 6th Edition of Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index is unveiled today. Like past editions, the report compiles and updates the results from the 50 state “laboratories of democracy,” and provides a clear account of how the nation’s top performing state economies have achieved impressive levels of economic growth.
State lawmakers working to emulate Utah, North Dakota, South Dakota, Wyoming, and Virginia (the top five states in this year’s economic outlook index), and diverge from Minnesota, California, Illinois, New York and Vermont (the bottom five states in this year’s economic outlook index), should look to embrace the free market, low tax, limited government principles described in Rich States, Poor States.
Used by state lawmakers in every state across America since the first edition in 2008, Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index continues to chronicle the good, bad and ugly of economic policy in each of the 50 states. The report is authored by economist Dr. Arthur B. Laffer, Wall Street Journal senior economics writer Stephen Moore and Jonathan Williams, director of the American Legislative Exchange Council’s Center for State Fiscal Reform. The authors rank the 2013 economic outlook of states using 15 equally weighted policy variables, including various tax rates, regulatory burdens and labor policies.
Commenting on Utah achieving the top spot in the 6th Edition of Rich States, Poor States, Jonathan Williams, director of the American Legislative Exchange Council’s Task Force on Tax and Fiscal Policy and co-author of the report, remarked, “Utah’s policies have remained strong, and because of their fiscal responsibility and commitment to competitiveness , they’ve ranked first every year for economic outlook since we’ve been writing the report.”
“Rich States, Poor States clearly demonstrates that limited regulation, low taxes, low debt and balanced budgets create the best environment for business, investment, and jobs,” said Utah State Senate President Wayne Niederhauser (SD-9).
North Carolina Speaker of the House, Thom Tillis, shared that, “Most state legislatures across the country are focused on reducing spending, lowering taxes and growing their economies. Rich States, Poor States continues to generate in-depth policy information that is critical to making decisions that will move states in a more economically sustainable direction. This publication is an important tool for policymakers, and I consider it essential to understanding what makes each state competitive in a global economy.”
Nationally, states with no or low personal and corporate income tax, low spending, and right-to-work laws were most likely to have a better economic outlook than states with high income taxes. In fact, over a ten year time period, the nine states with the lowest income tax rates have outperformed the nine states with the highest income taxes in population, job growth and revenue growth. More broadly, a piece written by economists Dr. Eric Fruits and Dr. Randall Pozdena, titled Tax Myths Debunked, details the strong correlation between past editions of Rich States, Poor States’ ALEC-Laffer State Economic State Competitiveness Index and state economic health.
Rich States, Poor States examines the latest trends in state economic growth. This year’s report focuses on the growing momentum in state capitols for fundamental pro-growth tax and pension reform. Rich States, Poor States also features a case study on California’s fiscal woes and outlines how California lawmakers can restore their state’s economic prosperity. Lastly, this year’s report sets the record straight on the relationship between free-market economic policies and prosperity.
The 15 economic policy variables used by the authors to rank the states have shown overtime to be among the most influential variables for state growth. Here are the top ten and bottom ten states for 2013 economic outlook:
Top Ten: 1. Utah 2. North Dakota 3. South Dakota 4. Wyoming 5. Virginia 6. Arizona 7. Idaho 8. Georgia 9. Florida 10. Mississippi
Bottom Ten: 40. Hawaii 41. Maine 42. Montana 43. Connecticut 44. Oregon 45. Rhode Island 46. Minnesota 47. California 48. Illinois 49. New York 50. Vermont
U.S. Senator Ted Cruz of Texas also said, “As Justice Brandeis noted, one of the happy aspects of the federal system is that a state may serve as a laboratory and try novel policy experiments. Anyone interested in brining economic success to their state should read this book.” Kentucky Senator Rand Paul added that, “It is important for policymakers to have a publication that helps and encourages economic growth and competition between states to encourage prosperity. Publications like this one help educate legislators and governors with the tools to understand which policies work and which policies will waste taxpayer dollars.”
“Rich States, Poor States provides insight and research into what state policies are shown to be effective in creating job growth and economic stability,” said co-author and economist Dr. Arthur B. Laffer. “The report is intended to be a resource for state lawmakers, citizen groups and all those who are interested in learning how to improve the economic health of their state.”
To view Rich States, Poor States and to see individual state data, visit www.alec.org/rsps.