A new study of state tax burdens ound that low-tax states outperform the higher tax states in employment, personal income and population.
The report, entitled “High Taxes Lower Economic Performance,” was conducted by the Maine Heritage Policy Center. It looked at all 50 states and their fiscal years of 1994 to 2004.
The study found that the ten lowest tax states have an average tax burdern of 9.5%. The top ten highest tax states had an average tax burden of 13%.
The low tax states were found to have population growth that was 172.1% higher than the high tax states. Personal income growth was 31.9% higher, while employment growth was 78.6% higher.
The report then compared the lowest 25 tax states with the 25 highest. The lowest tax states had an average tax burden of 9.9%. The highest tax states had an average tax burden of 11.5%.
The lowest tax states showed a population growth that was 74.4% higher than that of the higher tax states. Personal income growth was 15% higher, while employment growth was 32.6% higher.
The author of the study, J. Scott Moody, said that the “states with low taxes have greater job creation and wage growth than states, like Maine, with high taxes.”
“The data reveals that high tax states are missing out on the level job creation and wage growth that low tax states are experiencing,” he explained.
