An Inquiry into the Nature and Causes of the Wealth of States: How Taxes, Energy, and Worker Freedom will Change the Balance of Power Among States
In early 2012, The Wall Street Journal published an editorial, “The Heartland Tax Rebellion,” which brought to national attention the movement in many Midwestern states to replace their state income taxes with revenue sources that are less damaging to economic growth. The opinion piece compared the nine states with the highest personal income tax rates to the nine states without earned income taxes. In each category of growth (population, gross state product and employment) no-income tax states come out ahead, while high tax states lag behind. The debate continued in 2013, when Travis H. Brown’s groundbreaking book How Money Walks proved conclusively for the first time what many folks, including some of the country’s most famed economists, have long suspected: Americans are moving away from high-tax states and into low- and no-income tax states at alarming rates; and pro-growth policy at the state level is creating the winners, while big-government, tax-and-spend policies at the state level are creating the losers.
An Inquiry into the Nature and Causes of the Wealth of States is a detailed and critical look into the tax and regulatory policies across the 50 states and the subsequent economic growth or malaise that follows from these state policy choices. In short, the authors conclude you can’t tax a state into prosperity, nor can a poor person spend himself into wealth. Along the same lines, if you tax rich people and give the money to poor people, sooner or later you’ll have lots and lots of poor people and no rich people. Based on their detailed quantitative analysis with graphical evidence and colorful anecdotes sprinkled throughout, the authors’ detailed exposition evaluates the impact state and local government policies have on a state’s relative performance and lays down a roadmap to sound economic policies that lead to growth and prosperity.
Some of the most important variables examined in-depth include:
- Personal and corporate income tax rates
- Total tax burden as a percentage of personal income
- Estate and inheritance taxes
- Right-to-work laws