New Wealth of States Book on Kindle

The sequel to the original groundbreaking exposé, Wealth of States, adds to the mounting pile of evidence of which policy choices lead to economic growth. Included is an even more magnified view of – not just state – but city-level taxes and their impact on prosperity. You’ll also find an analysis of how equity prices respond to state tax policies – an often overlooked yet essential tool for properly managing equity portfolios.
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Recent News

Texas-Sized Tax Cut: Governor Abbott Signs Total Relief Tax Package Of $3.8 Billion

by Travis Brown When a state success story is as big as Texas’ is, the good news needs sharing beyond the immediate borders. When an already business-friendly state becomes even more hospitable to growth and innovation, that message needs to go worldwide. That’s exactly what Texas Governor Greg Abbott plans to do in the coming months. Already playing from a position of strength, the governor shored up Texas’ positive reputation even further this week, by securing a new business tax cut. In the legislative session that ended in Austin last week, legislators approved a 25 percent reduction in the state business franchise tax. Of course, this newly approved cut is not the only economic enticement luring new businesses to Texas. The Lone Star State levies no personal income tax and no corporate income tax. Additionally, the franchise (or “margins”) tax will be cut by $2.56 billion over the next two years, according to Governor Abbott. Texas is also making new investments in roads and education. In a legislative-session recap for reporters, the Governor told reporters, “When you consider what we achieved during this session, as well as the challenges other states are facing, I think we have a tremendous opportunity to capitalize on our current position.” Beginning in July, Abbott will begin a series of strategic trips around the United States and abroad, with the goal of closing economic development deals with corporate leaders. Rather than stick Texas taxpayers with the bill, Abbott will pay for the travel with money from the nonprofit TexasOne, a group that his gubernatorial predecessor (and now 2016 presidential hopeful) Rick Perry helped create....

Arthur Laffer has a never-ending supply of supply-side plans for GOP

By Jim Tankersley April 9 at 8:34 PM Arthur Laffer was waiting in the sun outside Terminal A of Reagan National Airport, smiling like the Gipper. It was 10:30 a.m., and he was just in from Nashville. In his briefcase were two papers he was eager to show off. One called minimum-wage laws a crime against black men. The other detailed all the ways liberal economists had been wrong about this economic recovery and Arthur Laffer had been right. No one has influenced Republican candidates’ thinking on the economy for the past four decades as much as Laffer, who is now 75. Laffer says he believes that limiting government and cutting tax rates, especially the rate levied on top earners, will unleash faster economic growth. Since he sold then-candidate Ronald Reagan on that prescription, every Republican presidential nominee has run on a Laffer-inspired economic platform. As the 2016 GOP primary season takes off, Laffer is more in demand than ever before, with Republican candidates embracing tax-cut-for-the-rich policies even as they bemoan economic inequality. Candidates have been meeting with him in recent weeks, and on Friday in Nashville, he says, his schedule includes Rick Perry at 10 a.m., Ben Carson at noon, Jeb Bush at 1:15 p.m. and Bobby Jindal at 5. Dinner is scheduled with Ted Cruz. He has already met at least once with Wisconsin Gov. Scott Walker. For the first time in a generation, however, Laffer’s “supply-side” strategies are not going without question on the right. Some conservatives believe that America’s struggling middle class needs more targeted policies today than simply broad tax cuts, and that Republicans won’t win...

The Wooing of a Washington Wonk

Stephen Moore paced the hallways of the Fox News studio one recent afternoon thinking about guest lists. The 55-year-old economist, fresh from a round of live interviews trashing Obamacare and extolling the wonders of hydraulic fracturing, makeup pancaked on his bespectacled face, was co-hosting Wisconsin Gov. Scott Walker that night at a private dinner at the 21 Club to introduce the 2016 hopeful to New York’s GOP elite — an event that would soon become very public thanks to a certain former mayor’s Obama-bashing. But Moore was by no means sold on Walker. Even as he was hosting the Republican Midwesterner-of-the-moment, he was planning another party back in Washington for Sen. Rand Paul. Less than a week after his glitzy New York dinner, he would gather several GOP economic eggheads for a steak and wine supper at a Capitol Hill townhouse to discuss taxes and monetary policy with Paul, and he still needed to work on the guest list. Stepping into a quiet corner of the network’s green room, Moore pulled out his Samsung flip phone to connect with Paul’s Senate legislative director. “Who’d Rand want at this dinner?” they asked each other, kicking around a short list of potential boldface names, including former George W. Bush White House adviser Lawrence Lindsey and Americans for Tax Reform President Grover Norquist. “I do feel like I’m holding down two jobs right now,” Moore would tell me later. “It’s a bit of a grind, but it’s also a labor of love.” What had turned the supply-sider into a party planner was a quadrennial mating ritual that shapes the presidential cycle even...

Without The Energy Revolution, Job Growth Would Drag

BY STEPHEN MOORE AND KATHLEEN HARTNETT WHITE Job growth is finally picking up, as we all know from bullish employment reports in January and February. But part of the jobs story isn’t told: How much of the faster pace of hiring is a result of low energy prices in America relative to our international competitors. The shale oil and gas revolution is behind the fall in gasoline and electricity prices, which in turn is unleashing a comeback in many industries. Consider the U.S. manufacturing boom, which can be seen in the revival of factories selling everything from plastics, cars and chemicals to potato and micro chips. The turnaround has little to do with government programs or subsidies. A major springboard is the lowest-in-the-world energy prices found here in America. As the nearby table shows, the U.S. now has the lowest electricity prices of any of our major industrial competitors, with the exception of South Korea. The differential is gigantic compared to Europe, with our power costs for industry anywhere from one-half to one-fifth those of producers in Euroland. Shale gas drilling technologies have lowered the cost of natural gas from more than $12 per thousand cubic feet in 2008 to around $4.50 now. Natural gas at these low prices is gradually replacing the use of coal as the No. 1 source of electricity production in America — though coal remains a cheap and major source of electricity production as well. This also explains how the U.S. has reduced its carbon emissions more than any other nation over the eight-year period ending in 2013. Now for the flip side of...

Time to Tell the Truth on Taxes

As a co-author that helped compile literally fifty years of evidence among and between state economic performance, articles like this New York Time’s piece entitled “Republican Governors Buck Party Line on Raising Taxes” remind me how important it is to have sound economic proofs available to those who need it.  Too often, major media sources are quick to brush off any look at the peer review literature that clearly points in one solid direction:  lots and lots of evidence that proves that lower marginal tax rates on income yields stronger economic growth.  More simply, when you lower the price of work, you see more of it.  As co-author Art Laffer likes to say, “this isn’t rocket surgery.” As one of last year’s New York Times Bestsellers in April 2014, our book, An Inquiry into the Nature and Causes of the Wealth of States, should be an easy reference off which to find an alternative point of view than that of Michael Leachman in this January 24, 2015 article.  A full list of peer review studies can be found within our book, along with an entire chapter entitled “Au Contraire, Mon Frere,” that looks at most opposing views.  Within Chapter Three, we address the effects of energy, personal income taxation, and overall tax burden in a very comprehensive way. The real spoiler here within the long-term data is not merely that states with lower income tax rates grow faster, but that those states with an overall lower tax burden grow their state and local tax revenue faster than those with higher burdens. When one looks back from 2002 to 2012,...

WSJ: The Tax-Cutting Boon Sweeping the States

With 31 governorships and dozens of statehouses in GOP hands, millions of Americans are finally getting tax relief. By STEPHEN MOORE Jan. 29, 2015 7:23 p.m. ET 249 COMMENTS While the prospects for tax reform in Washington are dim, as many as 20 Republican governors are moving forward with their own pro-growth tax-relief initiatives. This is on top of the 14 states, including Florida, Michigan, Ohio and Wisconsin, whose 2014 tax cuts will take effect this year. Arizona’s new Gov. Doug Ducey says his goal is to eventually eliminate the state income tax—joining the nine states that already don’t tax their residents’ wages and salaries. Mr. Ducey has promised income-tax cuts “every year I’m in office.” He announced his first cuts, indexing tax brackets for inflation and expensing for business capital spending, this month. To offset phasing out the income tax, he wants to close some of the state’s hundreds of sales-tax exemptions. In Arkansas, Republicans now control both houses of the state legislature and the governorship for the first time in more than 100 years. This will allow Asa Hutchinson, the state’s new governor, to push what he calls a “very ambitious” tax-reform agenda. Last week the state senate in Little Rock passed a one-percentage-point cut in the income-tax rate applying to middle-income earners ($21,000-$75,000). In Illinois, Maryland and Massachusetts—three blue states that elected Republican governors in November—tax rates are likely to fall to provide juice and jobs for local economies. In Illinois, Gov. Bruce Rauner vowed in his inaugural address to erase the income-tax-rate hikes of his Democratic predecessor, Pat Quinn. In Maryland, Larry Hogan won the...

A call to all politicians: cutting taxes is good for you and your constituents

Last November the U.S. had its general elections. The party of tax cuts and a pro-growth agenda – the Republicans this time – was able to command the largest majority in the Peoples’ House since the 71st Congress was in session from 1929 to 1930. Republicans were also able to wrest control of the Senate by flipping some 9 seats in the U.S. Senate. And that may not be the end of it. Two senators who have caucused with the Obama Democrats may actually switch parties and now caucus with Republicans. The first challenge to tax-increasing Democrats is in the works as I write. The new House and Senate are working to authorize the Keystone XL pipeline connecting oil fields with refineries from well inside Canada to the U.S. Gulf Coast. President Obama said he would veto the pipeline – despite the House already having voted to approve the pipeline 10 separate times – setting the tone that he and the anti-growth members of the Democratic Party will continue along the same path they have been forging for six years. But the authorization of the Keystone pipeline is merely a beginning of this historic struggle between growth and redistribution. In the weeks and months ahead, we will witness both houses of Congress moving to repeal Obamacare. The President will veto, and the veto will be upheld, but such confrontation will only serve to weaken the Democrats’ hold on power. November 2016 isn’t all that far away after all. And there will be many, many more heroic confrontations between the forces of growth and the legions of redistribution. And to...