The 12th edition of Rich States, Poor States, written by White House Advisors Arthur Laffer, Ph.D., Stephen Moore, and Jonathan Williams, chief economist for the American Legislative Exchange Council, pinpoints why some states in the union grow and prosper while others shrink and fail.
Based on the authors’ collective research, appropriate regulations, competitive tax rates, and wise government spending yields greater opportunities for all Americans. In particular, citizens in states where lawmakers are focused on establishing long-term prosperity benefit the most. This is especially true when those citizens trust the judgment of their political leaders and have witnessed the wisdom of their policies.
What’s more, from year to year, rich states in motion tend to maintain and even elevate prosperity, while poor states experience the opposite and issue lame laments about “tax breaks for the rich” and other go-to bromides.
15 Vital Policy Areas
As in each edition, Rich States, Poor States ranks the economic outlook of all 50 states based on 15 policy variables, which are given equal weight. These policy variables include top marginal personal income tax rate, top marginal corporate income tax rate, personal income tax progressivity, property tax burden, sales tax burden, and remaining tax burden.
Also included are estate or inheritance taxes levied, recently legislated tax changes, debt service as a share of tax revenue, public employees per 10,000 of population, state liability system surveys, state minimum wage, average workers' compensation costs, whether the state is right-to-work, and tax expenditure limits.
The common denominator among states that rank high in economic outlook is that they tax less and spend less, and they promote policies that either stimulate investment or increase employment, or do both.
Examining the list below, one can see that the 15 states of the union with the highest economic outlook ranking voted Republican in the last election presidential election (counting four states with votes still in question), including Utah, Wyoming, Idaho, Indiana, North Carolina, Nevada, Florida, Tennessee, Oklahoma, Arizona, North Dakota, Wisconsin, South Dakota, Michigan, and Texas.
Economic Outlook Ranking
From the best, Utah, to the worst, New York, here is the complete state roster:
5. North Carolina
11. North Dakota
13. South Dakota
17. New Hampshire
28. West Virginia
32. South Carolina
34. New Mexico
43. Rhode Island
48. New Jersey
50. New York
Notice that those states with the lowest economic outlook ranking, starting from the worst, New York, and including Vermont, New Jersey, Illinois, California, Minnesota, Hawaii, Rhode Island, Oregon, and Maine, all voted Democrat in the recent election.
Choose Your Fate
Republican-led states tend to prosper, Democrat-led states tend to suffer. A mere coincidence? With such a wide disparity in the economic outlook rankings and resulting economic prosperity, versus the lack thereof, Americans have had somewhat of a dual experience during President Trump’s time in office.
Those states that voted for Trump and for Republicans, in general, have had a different reality from those states that traditionally vote for Democrats. This economic disparity between different regions of the country has gone on not merely for years, but for decades. Those cities where economic devastation and destruction has occurred, once again, have voted for Democratic regimes, not merely for years, but for decades, and Republican-led cities tend to prosper, while Democrat-led cities tend to suffer.
Why don't states with poor economic outlook rankings, and cities that have long been in decline, emulate the policies and practices of states and cities that continue to prosper? That is a compelling question that is well worth pursuing and, in particular, a vital question for Democrat politicians and the millions of voters who aimlessly support them.