According to a study conducted by the American Legislative Exchange Council (ALEC), US states with the lowest taxes and lowest levels of government spending have prospered the best economically.
The ALEC noted in its study, Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index, that because of their economic growth low tax states are also seeing their populations grow as people migrate into the state.
The Daily Wire explains:
“[The report] teaches us that states with lower taxes, especially those that avoid personal income taxes, have seen significantly better rates of in-migration than states with [high-income] tax rates,” Jonathan Williams, executive vice president of policy at ALEC and co-author of the report, said in a statement to the DCNF.
California, New Jersey, and New York, states which impose higher-than-average tax burdens, are ranked 48th, 49th, and 50th in economic outlook rankings for 2022, according to the report.
“They follow, in a way, what President [Ronald] Reagan warned of, which was the liberal view of the economy [and] can be summed up as this: if it moves, tax it. If it keeps moving, regulate it. If it stops moving, subsidize it,” Williams told the DCNF.
On the growth side, Utah, North Carolina, and Arizona are the top economic performers. The report noted that have all seen a remarkable economic transformation as they reduced their respective tax burdens.
High tax states are seeing population declines
Not only are high taxes states seeing their economies struggle, they are also seeing population declines, which in turn results in lower tax revenues.
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