Reinforcing Economic Growth With Rich States, Poor States: Jonathan Williams on American Radio Journal

Every year, millions of Americans engage in a quiet but revealing form of decision-making: they move. These movements across state lines are not random acts, but choices shaped by incentives, constraints, and opportunities—economic realities that often speak louder than political rhetoric.

What drives those moves across state lines? For nearly two decades, the Rich States, Poor States Economic Competitiveness Index has tracked these patterns. Just in time for Tax Day 2026, alongside Dr. Arthur Laffer and Steve Moore, ALEC released the 19th edition of the Rich States, Poor States rankings. This year, with the Utah delegation, led by Senate President Stuart Adams and Speaker of the House Mike Schultz, at the White House and on Capitol Hill, the report’s premise is simple: policies have consequences, and those consequences can be observed in where people choose to live and work.

State governments, whether they acknowledge it or not, compete for labor, capital, and enterprises. When that competition is burdened by excessive taxation or regulation, people respond accordingly. This response is not theoretical. When the cost of remaining in a state rises through higher taxes or increased regulation, individuals and businesses have both the means and the incentive to relocate. Reports of high-income residents leaving states like California that are contemplating wealth taxes are not anomalies; they are predictable reactions to changing incentives.

Yet focusing only on those who leave misses a broader dynamic. Economic freedom tends to produce cumulative effects. Where markets are less constrained, businesses expand, new enterprises emerge, and individuals retain more of what they earn. These conditions foster not just higher incomes, but greater opportunity. In turn, environments that support these conditions attract more people—not only because taxes are lower, but because the resulting economic vitality offers tangible advantages, namely economic opportunity.

This process is self-reinforcing. Population growth expands demand, which supports further business activity, creating more jobs and income. It is not the product of government central planning, but of decentralized decisions made by individuals responding to economic incentives.

The latest Rich States, Poor States rankings underscore these patterns. Leading the nation in economic outlook is Utah, ranked first for 19 consecutive years. It is followed by Tennessee, Idaho, North Carolina, Arizona, Arkansas, Indiana, Oklahoma, South Dakota, and Florida. These states generally maintain lower tax burdens, lighter regulatory climates, and fiscal policies that emphasize growth over redistribution. It is no coincidence that many of these states operate with a flat tax or no personal income tax at all. Such policies reduce penalties on work, savings, and investment.

What is sometimes labeled a “race to the bottom” is more accurately a movement toward policies that impose fewer obstacles to economic growth. Over time, policy differences accumulate into measurable outcomes. States that consistently pursue growth-oriented policies tend to experience rising populations and expanding economies, while those that rely heavily on taxation and intervention often see slower growth or population decline, as seen in states like California and New York.

One implication is frequently overlooked: raising tax rates does not necessarily produce proportional increases in revenue. Beyond a certain point, higher tax rates can discourage economic activity and prompt relocation, reducing the tax base itself. The intended gains are often offset or even reversed. A more reliable approach is to expand the tax base by increasing the number of taxpayers.

The American system of federalism, now 250 years in the making, continues to create competition among states, just as the founders envisioned. Today, with greater mobility and access to information, individuals and businesses can compare jurisdictions more easily and act on those comparisons. Technology has further reduced the need to work in any particular location, intensifying this competition.

Migration, in this sense, becomes a form of feedback. It is one of the few mechanisms by which policy outcomes are continually tested against real-world behavior. People may state their preferences in elections, but they reveal them more clearly through their economic choices and where they decide to locate. The result is a decentralized check on policy excess. Governments that impose significant costs risk losing the resources they depend on, while those that foster opportunity tend to attract them over time.

This process shapes not only individual state economies, but the broader distribution of growth and prosperity across the United States.