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Rich States, Poor States ALEC-Laffer State Economic Competitiveness Index 2014 American Legislative Exchange Council All rights reserved. Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system without the prior permission of the publisher. Published by American Legislative Exchange Council 2900 Crystal Drive Arlington, VA 22202 www.alec.org Dr. Arthur B. Laffer, Stephen Moore, and Jonathan Williams, Authors Designed by Joel Sorrell Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index has been published by the American Legislative Exchange Council, Americas largest nonpartisan, voluntary membership organization of state legislators. Made up of nearly one-third of Americas state elected officials, the Council provides a unique opportunity for state lawmakers, business leaders and citizen organizations from around the country to share experiences and develop state-based, pro-growth models based on academic research, existing state policy and proven business practices. The American Legislative Exchange Council is classified by the Internal Revenue Service as a 501(c)(3) nonprofit and public policy and educational organization. Individuals, philanthropic foundations, corporations, companies, or associations are eligible to support the Councils work through tax-deductible gifts.
State Rankings
he Economic Outlook Ranking is a forecast based on a states current standing in 15 state policy variables. Each of these factors is influenced directly by state lawmakers through the legislative process. Generally speaking, states that spend lessespecially on income transfer programs, and states that tax lessparticularly on productive activities such as working or investingexperience higher growth rates than states that tax and spend more. The Economic Performance Ranking is a backward-looking measure based on a states performance on three important variables: State Gross Domestic Product, Absolute Domestic Migration, and Non-Farm Payroll Employmentall of which are highly influenced by state policy. This ranking details states individual performances over the past 10 years based on this economic data.
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Connecticut
Alabama
30
Cumulative 10%
8% 6% 4% 2% 0% -2% -4%
20
46.6% Rank: 27
AL U.S. Variable
15 16 17 20 21 17
Data 4.02% 4.23% -$1.76 $15.65 $24.02 $24.13 No -$0.30 8.1% 592.5 Rank 12 6 1 1 29 43 1 19 23 40
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate
(change in tax liability per $1,000 of income)
104,239
Rank: 13
(in thousands)
Debt Service as a Share of Tax Revenue 03 04 05 06 07 08 09 10 11 12 Public Employees Per 10,000 of Population (full-time equivalent)
(tort litigation treatment, judicial impartiality, etc.)
0.1%
Rank: 41
AL U.S.
52.8
43
1 30 1 34
Right-to-Work State?
Delaware
Alaska
11
15%
18
79.5% Rank: 3
AK U.S. Variable
37 38 22 29 29 21
Data 0.00% 9.40% $0.00 $44.29 $9.92 $14.96 No -$20.67 5.9% 753.2 Rank 1 43 2 42 5 8 1 1 8 49
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate Personal Income Tax Progressivity Property Tax Burden
(change in tax liability per $1,000 of income)
03
04
05
06
07
08
09
10
11
12
-7,930
Rank: 30
(in thousands)
Debt Service as a Share of Tax Revenue 03 04 05 06 07 08 09 10 11 12 Public Employees Per 10,000 of Population (full-time equivalent) State Liability System Survey
(tort litigation treatment, judicial impartiality, etc.)
12.8%
Rank: 5
AK U.S.
69.1
13
$7.75 $3.01 No 1
34 50 50 14
Right-to-Work State?
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Connecticut
Arizona
8
10% 8% 6% 4% 2% 0% -2% -4% -6% -8%
7
50.7% Rank: 23
AZ U.S.
6 3 3 12 9 6
Data 4.54% 6.50% $10.60 $31.72 $36.69 $12.80 No -$0.55 11.6% 431.8
Rank 13 21 31 27 45 3 1 12 46 2
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate
(change in tax liability per $1,000 of income)
2003-2012
618,037
Rank: 4
(in thousands)
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent)
(tort litigation treatment, judicial impartiality, etc.)
03
04
05
06
07
08
09
10
11
12
9.0%
Rank: 9
AZ U.S.
66.8
17
35 14 1 3
Right-to-Work State?
Delaware
Arkansas
21
6% 4% 2% 0% -2% -4%
26
47.7% Rank: 25
AR U.S. Variable
11 12 13 13 11 24
Data 7.00% 6.50% $14.42 $18.72 $37.70 $18.17 No $0.92 5.3% 598.1 Rank 35 21 40 4 46 26 1 43 5 41
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate
(change in tax liability per $1,000 of income)
03
04
05
06
07
08
09
10
11
12
(in thousands)
80,218
Rank: 15
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent) 03 04 05 06 07 08 09 10 11 12 State Liability System Survey
(tort litigation treatment, judicial impartiality, etc.)
3.1%
Rank: 26
AR U.S.
57.2
35
1 3 1 14
Right-to-Work State?
www.alec.org
Connecticut
California
43
8% 6% 4% 2% 0% -2% -4% -6%
47
44.4% Rank: 32
CA U.S. Variable
42 43 46 47 38 47
Data 13.30% 8.84% $37.80 $32.65 $24.47 $19.20 No $4.03 10.4% 466.1 Rank 50 38 50 28 31 28 1 49 39 4
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate Personal Income Tax Progressivity Property Tax Burden 03 04 05 06 07 08 09 10 11 12 Sales Tax Burden
(change in tax liability per $1,000 of income)
Rank: 49
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent) 03 04 05 06 07 08 09 10 11 12 State Liability System Survey
(tort litigation treatment, judicial impartiality, etc.)
50.6
47
0.4%
Rank: 39
CA U.S.
$8.00 $2.92 No 2
39 48 50 3
Right-to-Work State?
Delaware
Colorado
16
10% Cumulative 8% 6% 4% 2% 0% -2% -4%
22
46.9% Rank: 26
CO U.S. Variable
9 2 2 6 8 16
Data 4.63% 4.63% $6.27 $38.08 $23.91 $14.52 No $0.48 11.8% 527.0 Rank 14 8 20 38 27 7 1 40 47 21
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate
(change in tax liability per $1,000 of income)
(in thousands)
206,484
Rank: 10
40 30 20 10 0 -10
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent) 03 04 05 06 07 08 09 10 11 12
(tort litigation treatment, judicial impartiality, etc.)
64.2
23
7.1%
Rank: 14
CO U.S.
$8.00 $1.42 No 3
39 8 50 1
Right-to-Work State?
www.alec.org
Connecticut
Connecticut
Economic Performance Rank
45
8% 6% 4% 2% 0% -2% -4%
44
35.8% Rank: 44
CT U.S. Variable
40 32 36 35 44 43
Data 6.70% 9.00% $7.67 $45.36 $15.98 $15.43 Yes $1.90 8.3% 513.0 Rank 30 40 26 43 10 11 50 47 26 16
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate
(change in tax liability per $1,000 of income)
-117,924
Rank: 41
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent) State Liability System Survey
(tort litigation treatment, judicial impartiality, etc.)
03
04
05
06
07
08
09
10
11
12
63.8
25
-0.9%
Rank: 43
CT U.S.
$8.70 $2.99 No 1
47 49 50 14
Delaware
Delaware
26
8% 6% 4% 2% 0% -2% -4%
27
51.1% Rank: 21
DE U.S. Variable
2002-2012
31 31 37 34 34 30
Data 7.85% 10.41% $13.70 $17.50 $0.00 $48.06 Yes -$0.55 8.6% 544.1 Rank 39 47 38 3 1 50 50 13 29 27
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate
(change in tax liability per $1,000 of income)
44,580
Rank: 20
(in thousands)
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent) State Liability System Survey
(tort litigation treatment, judicial impartiality, etc.)
03
04
05
06
07
08
09
10
11
12
75.8
1.2%
Rank: 37
DE U.S.
$7.25 $1.77 No 2
1 21 50 3
Right-to-Work State?
www.alec.org
Florida
19
Cumulative 12%
10% 8% 6% 4% 2% 0% -2% -4%
16
45.0% Rank: 31
FL U.S. Variable
16 11 5 10 13 9
Data 0.00% 5.50% $0.00 $34.80 $28.34 $21.83 No $0.03 9.1% 466.7
Rank 1 13 2 30 38 40 1 31 34 5
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate Personal Income Tax Progressivity Property Tax Burden
(change in tax liability per $1,000 of income)
03
04
05
06
07
08
09
10
11
12
1,027,561
Rank: 2
(in thousands)
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent)
(tort litigation treatment, judicial impartiality, etc.)
03
04
05
06
07
08
09
10
11
12
55.3
41
3.4%
Rank: 25
FL U.S.
37 22 1 3
Right-to-Work State?
Georgia
27
6% 4% 2% 0% -2% -4%
9
38.1% Rank: 42
GA U.S.
8 8 9 11 10 8
Data 6.00% 6.00% $6.53 $29.95 $24.72 $11.32 No -$0.37 7.5% 518.5
Rank 27 14 22 23 32 1 1 18 19 18
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate Personal Income Tax Progressivity Property Tax Burden 03 04 05 06 07 08 09 10 11 12 Sales Tax Burden
(change in tax liability per $1,000 of income)
Cumulative 2003-2012
(in thousands)
485,993
Rank: 5
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent) State Liability System Survey
(tort litigation treatment, judicial impartiality, etc.)
03
04
05
06
07
08
09
10
11
12
64.0
24
2.2%
Rank: 34
GA U.S.
1 24 1 34
Right-to-Work State?
www.alec.org
Hawaii
17
8% 6% 4% 2% 0% -2% -4%
36
61.8% Rank: 11
HI U.S. Variable
41 41 39 46 46 40
Data 11.00% 6.40% $13.54 $22.62 $42.62 $24.54 Yes -$0.74 8.5% 535.1 Rank 48 19 37 9 50 45 50 9 27 24
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate
(change in tax liability per $1,000 of income)
-26,409
Rank: 31
(in thousands)
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent) State Liability System Survey
(tort litigation treatment, judicial impartiality, etc.)
03
04
05
06
07
08
09
10
11
12
62.5
29
8.7%
Rank: 10
HI U.S.
$7.25 $1.66 No 1
1 16 50 14
Right-to-Work State?
Idaho
10
Cumulative 14%
12% 10% 8% 6% 4% 2% 0% -2% -4%
5
54.4% Rank: 16
ID U.S.
10 14 7 5 6 7
Data 7.40% 7.40% $13.26 $26.41 $22.92 $15.62 No -$0.47 5.8% 491.2
Rank 37 28 36 14 24 13 1 14 7 10
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate Personal Income Tax Progressivity Property Tax Burden
(change in tax liability per $1,000 of income)
03
04
05
06
07
08
09
10
11
12
94,969
Rank: 14
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent)
(tort litigation treatment, judicial impartiality, etc.)
03
04
05
06
07
08
09
10
11
12
70.5
9.7%
Rank: 8
ID U.S.
1 32 1 14
Right-to-Work State?
www.alec.org
Illinois
46
6% 5% 4% 3% 2% 1% 0% -1% -2% -3%
48
39.7% Rank: 39
IL U.S. Variable
43 44 47 44 48 48
Data 5.00% 9.50% $1.42 $43.51 $16.36 $21.68 Yes $0.43 11.1% 499.4 Rank 17 44 14 41 11 38 50 39 43 11
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate
(change in tax liability per $1,000 of income)
03
04
05
06
07
08
09
10
11
12
-623,467
Rank: 48
(in thousands)
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent)
03
04
05
06
07
08
09
10
11
12
-1.6%
Rank: 47
IL U.S.
51.3
46
$8.25 $2.83 No 0
44 47 50 34
Right-to-Work State?
Indiana
38
8% 6% 4% 2% 0% -2% -4%
3
43.1% Rank: 34
IN U.S.
12 17 20 16 24 14
Data 5.02% 7.50% $0.67 $27.44 $27.25 $15.85 No -$0.59 9.0% 505.0 Rank 20 29 13 17 35 14 1 11 33 13
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate Personal Income Tax Progressivity Property Tax Burden 03 04 05 06 07 08 09 10 11 12 Sales Tax Burden
(change in tax liability per $1,000 of income)
-27,203
Rank: 33
(in thousands)
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent) State Liability System Survey
(tort litigation treatment, judicial impartiality, etc.)
03
04
05
06
07
08
09
10
11
12
69.0
14
0.5%
Rank: 38
IN U.S.
1 2 1 14
Right-to-Work State?
www.alec.org
Iowa
24
10% 8% 6% 4% 2% 0% -2% -4%
25
54.6% Rank: 15
IA U.S. Variable
25 35 28 23 22 25
Data 5.42% 9.90% $11.89 $35.15 $23.34 $17.57 Yes -$0.12 5.0% 564.8 Rank 23 46 33 32 26 21 50 21 3 33
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate
(change in tax liability per $1,000 of income)
03
04
05
06
07
08
09
10
11
12
-27,470
Rank: 34
(in thousands)
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent) 03 04 05 06 07 08 09 10 11 12
(tort litigation treatment, judicial impartiality, etc.)
69.5
10
4.9%
Rank: 19
IA U.S.
1 26 1 14
Right-to-Work State?
Kansas
32
Cumulative 10%
8% 6% 4% 2% 0% -2% -4%
15
51.6% Rank: 20
KS U.S. Variable
29 24 25 27 26 11
Data 4.80% 7.00% $7.56 $33.76 $28.32 $12.88 No -$2.38 10.3% 680.8 Rank 15 26 25 29 37 4 1 4 38 48
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate Personal Income Tax Progressivity Property Tax Burden 03 04 05 06 07 08 09 10 11 12 Sales Tax Burden
(change in tax liability per $1,000 of income)
-58,811
Rank: 38
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent) 03 04 05 06 07 08 09 10 11 12 State Liability System Survey
(tort litigation treatment, judicial impartiality, etc.)
70.6
2.7%
Rank: 29
KS U.S.
1 10 1 34
Right-to-Work State?
www.alec.org
Kentucky
28
6% 5% 4% 3% 2% 1% 0% -1% -2% -3%
39
42.8% Rank: 35
KY U.S. Variable
44 36 40 40 39 38
Data 8.20% 6.00% $5.51 $20.42 $19.69 $21.67 Yes $0.36 13.5% 564.4 Rank 42 14 18 7 17 37 50 37 50 32
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate Personal Income Tax Progressivity Property Tax Burden 03 04 05 06 07 08 09 10 11 12 Sales Tax Burden
(change in tax liability per $1,000 of income)
75,684
Rank: 16
(in thousands)
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent) 03 04 05 06 07 08 09 10 11 12
(tort litigation treatment, judicial impartiality, etc.)
56.8
38
2.5%
Rank: 30
KY U.S.
$7.25 $1.96 No 1
1 29 50 14
Right-to-Work State?
Louisiana
29
20% 15% 10% 5% 0% -5% -10%
29
74.8% Rank: 6
LA U.S. Variable
24 18 16 15 19 28
Data 3.62% 5.20% $10.19 $20.42 $37.84 $18.42 No -$0.02 11.4% 589.8 Rank 11 12 29 6 47 27 1 24 44 39
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate
(change in tax liability per $1,000 of income)
-253,511
Rank: 44
(in thousands)
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent) 03 04 05 06 07 08 09 10 11 12 State Liability System Survey
(tort litigation treatment, judicial impartiality, etc.)
46.5
49
2.4%
Rank: 31
LA U.S.
1 36 1 3
Right-to-Work State?
www.alec.org
Maine
Maine
42
8% 6% 4% 2% 0% -2% -4%
40
34.2% Rank: 47
ME U.S. Variable
46 47 44 48 47 41
Data 7.95% 8.93% $19.31 $47.52 $19.99 $20.05 Yes -$0.75 6.2% 583.2 Rank 41 39 47 46 19 31 50 8 9 38
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate Personal Income Tax Progressivity Property Tax Burden Sales Tax Burden
(change in tax liability per $1,000 of income)
03
04
05
06
07
08
09
10
11
12
12,953
Rank: 25
(in thousands)
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent) 03 04 05 06 07 08 09 10 11 12 State Liability System Survey
(tort litigation treatment, judicial impartiality, etc.)
69.2
12
-1.6%
Rank: 46
ME U.S.
$7.50 $2.24 No 1
31 41 50 14
Right-to-Work State?
Maryland
Maryland
31
8% 6% 4% 2% 0% -2% -4%
34
53.7% Rank: 18
MD U.S. Variable
28 28 29 21 20 35
Data 8.95% 8.25% $6.95 $28.27 $13.08 $17.91 Yes $1.15 6.4% 528.2 Rank 43 35 23 19 8 25 50 46 11 23
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate
(change in tax liability per $1,000 of income)
Personal Income Tax Progressivity Property Tax Burden Sales Tax Burden
03
04
05
06
07
08
09
10
11
12
-123,674
Rank: 42
(in thousands)
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent) State Liability System Survey
(tort litigation treatment, judicial impartiality, etc.)
03
04
05
06
07
08
09
10
11
12
58.3
33
4.4%
Rank: 22
MD U.S.
$7.25 $1.68 No 0
1 17 50 34
Right-to-Work State?
www.alec.org
Massachusetts
41
6% 5% 4% 3% 2% 1% 0% -1% -2% -3%
28
40% Rank: 38
MA U.S. Variable
22 26 32 24 25 29
Data 5.20% 8.00% $3.05 $37.94 $14.05 $11.72 Yes $0.64 10.8% 486.9 Rank 21 33 16 36 9 2 50 41 41 8
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate
(change in tax liability per $1,000 of income)
03
04
05
06
07
08
09
10
11
12
-239,960
Rank: 43
(in thousands)
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent) State Liability System Survey
(tort litigation treatment, judicial impartiality, etc.)
03
04
05
06
07
08
09
10
11
12
66.3
19
1.7%
Rank: 36
MA U.S.
$8.00 $1.37 No 1
39 7 50 14
Right-to-Work State?
Michigan
50
6% 4% 2% 0% -2% -4% -6%
12
13.8% Rank: 50
MI U.S. Variable
17 34 26 25 17 20
Data 6.65% 8.00% $2.27 $38.00 $26.54 $15.31 No -$0.72 8.9% 461.0 Rank 29 33 15 37 34 10 1 10 32 3
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate Personal Income Tax Progressivity Property Tax Burden 03 04 05 06 07 08 09 10 11 12 Sales Tax Burden
(change in tax liability per $1,000 of income)
-573,817
Rank: 47
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent) 03 04 05 06 07 08 09 10 11 12 State Liability System Survey
(tort litigation treatment, judicial impartiality, etc.)
63.0
27
-10%
Rank: 50
MI U.S.
30 19 1 3
Right-to-Work State?
www.alec.org
Minnesota
33
8% 6% 4% 2% 0% -2% -4%
46
46.2% Rank: 29
MN U.S. Variable
39 40 38 37 41 46
Data 9.85% 9.80% $18.27 $34.85 $20.29 $22.86 Yes $5.65 7.1% 519.1 Rank 45 45 45 31 21 41 50 50 15 19
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate
(change in tax liability per $1,000 of income)
03
04
05
06
07
08
09
10
11
12
-64,954
Rank: 40
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent) 03 04 05 06 07 08 09 10 11 12
(tort litigation treatment, judicial impartiality, etc.)
71.4
3.0%
Rank: 27
MN U.S.
$7.25 $2.03 No 0
1 34 50 34
Right-to-Work State?
Mississippi
39
6% 4% 2% 0% -2% -4%
14
46.0% Rank: 30
MS U.S. Variable
19 19 18 19 15 10
Data 5.00% 5.00% $7.53 $27.25 $31.78 $20.37 No -$0.05 6.2% 640.9 Rank 17 9 24 15 41 32 1 22 10 45
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate
(change in tax liability per $1,000 of income)
-32,013
Rank: 36
(in thousands)
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent) 03 04 05 06 07 08 09 10 11 12
(tort litigation treatment, judicial impartiality, etc.)
46.6
48
-1.1%
Rank: 44
MS U.S.
1 9 1 3
Right-to-Work State?
www.alec.org
Missouri
Missouri
40
7% 6% 5% 4% 3% 2% 1% 0% -1% -2% -3%
24
34.7% Rank: 46
MO U.S. Variable
25 23 15 9 7 23
Data 7.00% 6.16% $13.92 $26.31 $22.17 $16.05 No $0.00 9.2% 527.5 Rank 34 18 39 13 23 15 1 26 35 22
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate Personal Income Tax Progressivity Property Tax Burden 03 04 05 06 07 08 09 10 11 12 Sales Tax Burden
(change in tax liability per $1,000 of income)
7,025
Rank: 28
(in thousands)
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent) State Liability System Survey
(tort litigation treatment, judicial impartiality, etc.)
03
04
05
06
07
08
09
10
11
12
57.8
34
-0.6%
Rank: 42
MO U.S.
$7.50 $1.62 No 3
31 15 50 1
Montana
Montana
Economic Performance Rank
5
8% 6% 4% 2% 0% -2% -4%
43
70.0% Rank: 7
MT U.S. Variable
32 30 33 36 36 42
Data 6.90% 6.75% $17.72 $37.84 $0.00 $24.86 No -$0.14 6.4% 574.2 Rank 32 25 44 35 1 46 1 20 12 36
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate Personal Income Tax Progressivity Property Tax Burden 03 04 05 06 07 08 09 10 11 12 Sales Tax Burden
(change in tax liability per $1,000 of income)
46,220
Rank: 19
(in thousands)
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent) State Liability System Survey
(tort litigation treatment, judicial impartiality, etc.)
03
04
05
06
07
08
09
10
11
12
52.2
45
11.7%
Rank: 6
MT U.S.
$7.90 $2.50 No 0
35 43 50 34
Right-to-Work State?
www.alec.org
Nebraska
20
8% 6% 4% 2% 0% -2% -4%
35
62.2% Rank: 10
NE U.S. Variable
34 29 34 32 31 37
Data 6.84% 7.81% $18.43 $37.43 $22.02 $17.64 Yes $0.20 8.0% 652.0 Rank 31 31 46 34 22 22 50 36 22 47
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate
(change in tax liability per $1,000 of income)
03
04
05
06
07
08
09
10
11
12
-28,349
Rank: 35
(in thousands)
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent)
(tort litigation treatment, judicial impartiality, etc.)
03
04
05
06
07
08
09
10
11
12
74.1
6.1%
Rank: 16
NE U.S.
1 18 1 34
Right-to-Work State?
Nevada
7
15% 10% 5% 0% -5%
8
61.4% Rank: 12
NV U.S.
7 7 11 17 18 13
Data 0.00% 0.00% $0.00 $29.91 $32.17 $36.70 No $0.00 10.6% 418.8 Rank 1 1 2 21 42 49 1 27 40 1
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate
(change in tax liability per $1,000 of income)
Personal Income Tax Progressivity Property Tax Burden Sales Tax Burden
03
-10%
04
05
06
07
08
09
10
11
12
273,594
Rank: 8
(in thousands)
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent)
(tort litigation treatment, judicial impartiality, etc.)
03
04
05
06
07
08
09
10
11
12
57.0
37
8.3%
Rank: 13
NV U.S.
44 5 1 3
Right-to-Work State?
www.alec.org
New Hampshire
34
7% 6% 5% 4% 3% 2% 1% 0% -1% -2% -3%
32
38.4% Rank: 41
NH U.S. Variable
26 37 30 28 28 27
Data 0.00% 8.50% $0.00 $54.32 $0.00 $21.74 No -$0.02 9.5% 547.4 Rank 1 36 2 49 1 39 1 25 37 28
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate
(change in tax liability per $1,000 of income)
03
04
05
06
07
08
09
10
11
12
10,282
Rank: 27
(in thousands)
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent) 03 04 05 06 07 08 09 10 11 12
(tort litigation treatment, judicial impartiality, etc.)
65.7
21
3.0%
Rank: 28
NH U.S.
$7.25 $2.40 No 0
1 42 50 34
Right-to-Work State?
New Jersey
48
7% 6% 5% 4% 3% 2% 1% 0% -1% -2% -3%
45
34.8% Rank: 45
NJ U.S. Variable
48 46 48 45 42 39
Data 9.97% 9.00% $24.81 $55.54 $17.73 $14.49 Yes -$1.05 6.6% 551.6 Rank 46 40 48 50 13 6 50 7 13 29
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate
(change in tax liability per $1,000 of income)
03
04
05
06
07
08
09
10
11
12
-491,479
Rank: 46
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent) 03 04 05 06 07 08 09 10 11 12 State Liability System Survey
(tort litigation treatment, judicial impartiality, etc.)
60.1
32
-1.4%
Rank: 45
NJ U.S.
$8.25 $2.74 No 1
44 44 50 14
www.alec.org
New Mexico
23
10% 8% 6% 4% 2% 0% -2% -4%
37
50.2% Rank: 24
NM U.S. Variable
27 25 35 39 35 33
Data 4.90% 7.30% $10.36 $19.38 $39.70 $15.51 No $0.18 8.0% 604.4 Rank 16 27 30 5 49 12 1 34 21 43
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate Personal Income Tax Progressivity Property Tax Burden 03 04 05 06 07 08 09 10 11 12 Sales Tax Burden
(change in tax liability per $1,000 of income)
26,159
Rank: 23
(in thousands)
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent) 03 04 05 06 07 08 09 10 11 12
(tort litigation treatment, judicial impartiality, etc.)
52.7
44
4.9%
Rank: 20
NM U.S.
$7.50 $1.88 No 0
31 24 50 34
Right-to-Work State?
New York
35
10% Cumulative 8% 6% 4% 2% 0% -2% -4%
50
46.6% Rank: 28
NY U.S. Variable
49 50 50 50 50 49
Data 12.70% 17.16% $12.53 $45.92 $24.27 $20.84 Yes $0.01 9.4% 603.8 Rank 49 50 34 44 30 34 50 30 36 42
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate Personal Income Tax Progressivity Property Tax Burden Sales Tax Burden
(change in tax liability per $1,000 of income)
03
04
05
06
07
08
09
10
11
12
Rank: 50
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent) State Liability System Survey
(tort litigation treatment, judicial impartiality, etc.)
03
04
05
06
07
08
09
10
11
12
66.4
18
4.4%
Rank: 21
NY U.S.
$8.00 $2.82 No 0
39 46 50 34
Right-to-Work State?
www.alec.org
North Carolina
12
8% 6% 4% 2% 0% -2%
6
50.9% Rank: 22
NC U.S.
21 21 21 26 23 22
Data 5.80% 6.00% $5.80 $25.02 $23.97 $16.88 No -$0.46 7.2% 575.7 Rank 25 14 19 12 28 18 1 15 16 37
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate Personal Income Tax Progressivity Property Tax Burden
(change in tax liability per $1,000 of income)
03 -4%
04
05
06
07
08
09
10
11
12
642,378
Rank: 3
(in thousands)
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent) State Liability System Survey
(tort litigation treatment, judicial impartiality, etc.)
03
04
05
06
07
08
09
10
11
12
65.8
20
5.2%
Rank: 17
NC U.S.
1 26 1 14
Right-to-Work State?
North Dakota
North Dakota
Economic Performance Rank
4
16% 14% 12% 10% 8% 6% 4% 2% 0% -2% -4%
4
125.1% Rank: 1
18 13 12 7 5 2
Data 3.22% 4.53% $9.01 $23.83 $29.47 $19.53 No -$3.78 3.9% 650.7
Rank 10 7 28 11 39 29 1 2 2 46
ND U.S.
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate
(change in tax liability per $1,000 of income)
10,441
Rank: 26
(in thousands)
Debt Service as a Share of Tax Revenue 03 04 05 06 07 08 09 10 11 12 Public Employees Per 10,000 of Population (full-time equivalent) State Liability System Survey
(tort litigation treatment, judicial impartiality, etc.)
32.2%
Rank: 1
ND U.S.
69.8
1 1 1 34
Right-to-Work State?
www.alec.org
Ohio
49
6% 4% 2% 0% -2% -4%
23
28% Rank: 49
OH U.S. Variable
47 45 42 38 37 26
Data 7.89% 3.62% $12.88 $30.40 $18.66 $20.83 No -$1.97 7.2% 514.3 Rank 40 5 35 24 15 33 1 5 17 17
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate
(change in tax liability per $1,000 of income)
03
04
05
06
07
08
09
10
11
12
-365,002
Rank: 45
(in thousands)
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent) 03 04 05 06 07 08 09 10 11 12
(tort litigation treatment, judicial impartiality, etc.)
62.1
30
-4.7%
Rank: 49
OH U.S.
$7.95 $1.84 No 1
38 23 50 14
Right-to-Work State?
Oklahoma
9
12% 10% 8% 6% 4% 2% 0% -2% -4% -6% -10% 03 -8%
21
62.9% Rank: 9
OK U.S. Variable
14 15 14 14 14 19
Data 5.25% 6.00% $7.84 $15.74 $27.74 $16.26 No $0.00 6.9% 566.3 Rank 22 14 27 2 36 16 1 29 14 35
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate Personal Income Tax Progressivity Property Tax Burden 04 05 06 07 08 09 10 11 12 Sales Tax Burden
(change in tax liability per $1,000 of income)
67,198
Rank: 17
(in thousands)
Debt Service as a Share of Tax Revenue 03 04 05 06 07 08 09 10 11 12 Public Employees Per 10,000 of Population (full-time equivalent) State Liability System Survey
(tort litigation treatment, judicial impartiality, etc.)
55.0
42
8.5%
Rank: 12
OK U.S.
1 45 1 3
Right-to-Work State?
www.alec.org
Oregon
13
Cumulative 14%
12% 10% 8% 6% 4% 2% 0% -2% -4%
42
66.2% Rank: 8
OR U.S. Variable
35 39 41 43 45 44
Data 10.62% 11.25% $15.41 $35.64 $0.00 $21.38 Yes $0.88 8.9% 509.6 Rank 47 48 41 33 1 36 50 42 31 14
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate
(change in tax liability per $1,000 of income)
Personal Income Tax Progressivity Property Tax Burden Sales Tax Burden
03
04
05
06
07
08
09
10
11
12
166,474
Rank: 11
(in thousands)
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent) 03 04 05 06 07 08 09 10 11 12 State Liability System Survey
(tort litigation treatment, judicial impartiality, etc.)
62.6
28
3.7%
Rank: 23
OR U.S.
$9.10 $1.58 No 2
49 12 50 3
Right-to-Work State?
Pennsylvania
37
7% 6% 5% 4% 3% 2% 1% 0% -1% -2% -3%
33
41.7% Rank: 36
PA U.S. Variable
36 42 43 41 40 34
Data 7.00% 17.05% $0.00 $30.40 $17.55 $24.46 Yes -$2.66 8.6% 467.7 Rank 33 49 2 25 12 44 50 3 28 6
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate
(change in tax liability per $1,000 of income)
03
04
05
06
07
08
09
10
11
12
-26,848
Rank: 32
(in thousands)
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent) 03 04 05 06 07 08 09 10 11 12 State Liability System Survey
(tort litigation treatment, judicial impartiality, etc.)
56.3
39
1.9%
Rank: 35
PA U.S.
$7.25 $2.15 No 0
1 39 50 34
Right-to-Work State?
www.alec.org
Rhode Island
47
7% 6% 5% 4% 3% 2% 1% 0% -1% -2% -3%
41
33.6% Rank: 48
RI U.S. Variable
45 48 45 42 43 45
Data 5.99% 9.00% $11.40 $49.18 $17.84 $17.70 Yes $0.15 11.0% 471.0 Rank 26 40 32 47 14 23 50 33 42 7
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate Personal Income Tax Progressivity Property Tax Burden
(change in tax liability per $1,000 of income)
03
04
05
06
07
08
09
10
11
12
-63,806
Rank: 39
(in thousands)
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent) State Liability System Survey
(tort litigation treatment, judicial impartiality, etc.)
03
04
05
06
07
08
09
10
11
12
60.9
31
-3.3%
Rank: 48
RI U.S.
$8.00 $1.99 No 1
39 31 50 14
Right-to-Work State?
South Carolina
22
7% 6% 5% 4% 3% 2% 1% 0% -1% -2% -3%
31
41.7% Rank: 37
SC U.S. Variable
20 20 31 22 27 31
Data 7.00% 5.00% $16.00 $30.82 $20.21 $17.10 No -$0.04 13.3% 540.8 Rank 35 9 43 26 20 20 1 23 49 25
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate
(change in tax liability per $1,000 of income)
03
04
05
06
07
08
09
10
11
12
Cumulative 2003-2012
(in thousands)
318,593
Rank: 6
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent) 03 04 05 06 07 08 09 10 11 12 State Liability System Survey
(tort litigation treatment, judicial impartiality, etc.)
56.3
39
3.5%
Rank: 24
1 35 1 14
SC U.S.
Right-to-Work State?
www.alec.org
South Dakota
15
8% 6% 4% 2% 0% -2% -4%
2
53.8% Rank: 17
SD U.S.
2 5 4 2 2 3
Data 0.00% 0.00% $0.00 $27.95 $31.26 $16.95 No $0.00 8.2% 552.0
Rank 1 1 2 18 40 19 1 28 24 30
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate
(change in tax liability per $1,000 of income)
03
04
05
06
07
08
09
10
11
12
16,932
Rank: 24
(in thousands)
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent)
(tort litigation treatment, judicial impartiality, etc.)
03
04
05
06
07
08
09
10
11
12
69.5
10
9.8%
Rank: 7
SD U.S.
1 28 1 14
Right-to-Work State?
Tennessee
25
7% 6% 5% 4% 3% 2% 1% 0% -1% -2% -3%
19
43.5% Rank: 33
TN U.S. Variable
3 9 10 8 12 18
Data 0.00% 6.50% $0.00 $22.06 $35.21 $19.75 Yes $0.09 8.7% 512.0 Rank 1 21 2 8 44 30 50 32 30 15
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate
(change in tax liability per $1,000 of income)
03
04
05
06
07
08
09
10
11
12
282,763
Rank: 7
(in thousands)
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent) 03 04 05 06 07 08 09 10 11 12
(tort litigation treatment, judicial impartiality, etc.)
63.7
26
2.3%
Rank: 33
1 32 1 14
TN U.S. 03 04 05 06 07 08 09 10 11 12
Right-to-Work State?
www.alec.org
Texas
1
12% 10% 8% 6% 4% 2% 0% -2% -4% -6% -8%
13
78.5% Rank: 4
TX U.S. Variable
13 10 19 18 16 12
Data 0.00% 2.65% $0.00 $39.22 $23.10 $21.05 No -$0.39 12.1% 565.2 Rank 1 4 2 39 25 35 1 17 48 34
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate
(change in tax liability per $1,000 of income)
03
04
05
06
07
08
09
10
11
12
1,041,977
Rank: 1
(in thousands)
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent) 03 04 05 06 07 08 09 10 11 12 State Liability System Survey
(tort litigation treatment, judicial impartiality, etc.)
57.2
35
16.9%
Rank: 3
1 13 1 14
TX U.S.
Right-to-Work State?
Utah
2
12% 10% 8% 6% 4% 2% 0% -2% -4%
1
74.9% Rank: 5
UT U.S.
1 1 1 1 1 1
Data 5.00% 5.00% $0.00 $27.37 $26.19 $15.20 No $0.19 7.7% 523.1
Rank 17 9 2 16 33 9 1 35 20 20
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate
(change in tax liability per $1,000 of income)
03
04
05
06
07
08
09
10
11
12
63,532
Rank: 18
(in thousands)
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent)
(tort litigation treatment, judicial impartiality, etc.)
03
04
05
06
07
08
09
10
11
12
69.7
17.7%
Rank: 2
UT U.S.
1 6 1 14
Right-to-Work State?
www.alec.org
Vermont
36
7% 6% 5% 4% 3% 2% 1% 0% -1% -2% -3%
49
39.3% Rank: 40
VT U.S. Variable
50 49 49 49 49 50
Data 8.95% 8.50% $28.56 $52.97 $12.90 $29.57 Yes $1.12 5.5% 632.6 Rank 43 36 49 48 7 48 50 45 6 44
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate
(change in tax liability per $1,000 of income)
-5,973
Rank: 29
(in thousands)
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent) 03 04 05 06 07 08 09 10 11 12 State Liability System Survey
(tort litigation treatment, judicial impartiality, etc.)
67.1
16
2.4%
Rank: 32
VT U.S.
$8.73 $2.07 No 0
48 37 50 34
Right-to-Work State?
Virginia
14
Cumulative 10%
8% 6% 4% 2% 0% -2% -4%
11
53.3% Rank: 19
VA U.S. Variable
5 4 8 3 3 5
Data 5.75% 7.55% $6.45 $29.92 $12.06 $16.51 No $1.01 8.3% 542.7
Rank 24 30 21 22 6 17 1 44 25 26
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate Personal Income Tax Progressivity Property Tax Burden
(change in tax liability per $1,000 of income)
03
04
05
06
07
08
09
10
11
12
139,202
Rank: 12
(in thousands)
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent) 03 04 05 06 07 08 09 10 11 12 State Liability System Survey
(tort litigation treatment, judicial impartiality, etc.)
70.2
7.1%
Rank: 15
VA U.S.
1 4 1 34
Right-to-Work State?
www.alec.org
Washington
6
10% 8% 6% 4% 2% 0% -2% -4%
38
58.5% Rank: 13
WA U.S. Variable
30 22 24 33 33 36
Data 0.00% 6.45% $0.00 $29.42 $33.57 $23.02 Yes $0.41 11.5% 500.0 Rank 1 20 2 20 43 42 50 38 45 12
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate
(change in tax liability per $1,000 of income)
03
04
05
06
07
08
09
10
11
12
249,650
Rank: 9
(in thousands)
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent) State Liability System Survey
(tort litigation treatment, judicial impartiality, etc.)
03
04
05
06
07
08
09
10
11
12
65.4
22
8.6%
Rank: 11
WA U.S.
$9.32 $2.11 No 1
50 38 50 14
Right-to-Work State?
West Virginia
18
6% 5% 4% 3% 2% 1% 0% -1% -2% -3%
30
55.8% Rank: 14
Variable
38 33 27 31 30 32
Data 6.50% 6.50% $15.53 $23.48 $19.89 $29.19 No -$0.41 5.2% 555.9 Rank 28 21 42 10 18 47 1 16 4 31
Top Marginal Personal Income Tax Rate WV U.S. Top Marginal Corporate Income Tax Rate Personal Income Tax Progressivity Property Tax Burden 03 04 05 06 07 08 09 10 11 12 Sales Tax Burden
(change in tax liability per $1,000 of income)
26,328
Rank: 22
(in thousands)
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent) 03 04 05 06 07 08 09 10 11 12 State Liability System Survey
(tort litigation treatment, judicial impartiality, etc.)
44.8
50
5.0%
Rank: 18
WV U.S.
$7.25 $1.55 No 0
1 11 50 34
Right-to-Work State?
www.alec.org
Wisconsin
44
7% 6% 5% 4% 3% 2% 1% 0% -1% -2% -3%
17
37.5% Rank: 43
WI U.S. Variable
33 27 23 30 32 15
Data 7.65% 7.90% $3.93 $43.29 $19.55 $17.86 No -$1.37 7.3% 489.5 Rank 38 32 17 40 16 24 1 6 18 9
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate Personal Income Tax Progressivity Property Tax Burden
(change in tax liability per $1,000 of income)
03
04
05
06
07
08
09
10
11
12
-39,812
Rank: 37
(in thousands)
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent) 03 04 05 06 07 08 09 10 11 12 State Liability System Survey
(tort litigation treatment, judicial impartiality, etc.)
68.4
15
0.2%
Rank: 40
WI U.S.
$7.25 $2.15 No 2
1 39 50 3
Right-to-Work State?
Wyoming
3
20% 15% 10% 5% 0% -5% -10% -15% 03
10
99.5% Rank: 2
WY U.S. Variable
4 6 6 4 4 4
Data 0.00% 0.00% $0.00 $46.01 $39.17 $13.13 No $2.47 3.0% 918.2 1 1 2 45 48 5 1 48 1 50
Rank
Top Marginal Personal Income Tax Rate Top Marginal Corporate Income Tax Rate
(change in tax liability per $1,000 of income)
04
05
06
07
08
09
10
11
12
29,112
Rank: 21
(in thousands)
Debt Service as a Share of Tax Revenue Public Employees Per 10,000 of Population (full-time equivalent) 03 04 05 06 07 08 09 10 11 12
(tort litigation treatment, judicial impartiality, etc.)
72.6
16.6%
Rank: 4
WY U.S.
1 20 1 34
Right-to-Work State?
www.alec.org
APPENDIX
Appendix
n previous editions of this report we introduced 15 policy variables that have a proven impact on the migration of capitalboth investment and humaninto and out of states. The end result of an equally weighted combination of these variables is the 2014 ALEC-Laffer Economic Outlook rankings of the states. Each of these factors is influenced directly by state lawmakers through the legislative process. The 15 factors and a basic description of their purposes, sourcing, and subsequent calculation methodologies are as follows: HIGHEST MARGINAL PERSONAL INCOME TAX RATE This ranking includes local taxes, if any, and any impact of federal deductibility, if allowed. A states largest city was used as a proxy for local tax rates. Data were drawn from: Tax Analysts, Tax Administrators, and individual state tax return forms. Tax rates are as of January 1, 2014. HIGHEST MARGINAL CORPORATE INCOME TAX RATE This variable includes local taxes, if any, and includes the effect of federal deductibility, if allowed. A states largest city was used as a proxy for local tax rates. In the case of gross receipts or business franchise taxes, an effective tax rate was approximated using NIPA profits, rental and proprietors income, and gross domestic product data. The Texas Franchise tax is not a traditional gross receipts tax, but is instead a margin tax with more than one rate. A margin tax creates less distortion than does a gross receipts tax. Therefore, what we believe is the best measurement for an effective corporate tax rate for Texas is to average the 4.3 percent measure we would use if the tax was a gross receipts tax and the 1 percent highest rate on its margin tax, leading to our measure of 2.65 percent. Data were drawn from: Tax Analysts, Tax Administrators, individual state tax return forms, and the Bureau of Economic Analysis. Tax rates are as of January 1, 2014. PERSONAL INCOME TAX PROGRESSIVITY This variable was measured as the difference between the average tax liability per $1,000 at incomes of $50,000 and $150,000. The tax liabilities were measured using a combination of effective tax rates, exemptions, and deductions at both state and federal levels, which are calculations from Laffer Associates. PROPERTY TAX BURDEN This variable was calculated by taking tax revenues from property taxes per $1,000 of personal income. We have used U.S. Census Bureau data, for which the most recent year available is 2011. These data were released in July 2013. SALES TAX BURDEN This variable was calculated by taking tax revenues from sales taxes per $1,000 of personal income. Sales taxes taken into consideration include the general sales tax and specific sales taxes. We have used U.S. Census Bureau Data, for which the most recent year available is 2011. Where appropriate, gross receipts or business franchise taxes, counted as sales taxes in the Census data, were subtracted from a states total sales taxes in order to avoid double-counting tax burden in a state. These data were released in July 2013. REMAINING TAX BURDEN This variable was calculated by taking tax revenues from all taxesexcluding personal income, corporate income (including corporate license), property, sales, and severance per $1,000 of personal income. We used U.S. Census Bureau Data, for which the most recent year available is 2011. These data were released in July 2013. ESTATE OR INHERITANCE TAX (YES OR NO) This variable assesses if a state levies an estate or inheritance tax. We chose to score states based on either a yes for the presence of a state-level
estate or inheritance tax, or a no for the lack thereof. Data were drawn from: McGuire Woods LLP, State Death Tax Chart: Revised January 1, 2014, and indicate the presence of an estate or inheritance tax as of January 1, 2014. RECENTLY LEGISLATED TAX CHANGES This variable calculates each states relative change in tax burden over a two-year period (in this case, the 2012 and 2013 legislative session) for the immediate next fiscal year, using revenue estimates of legislated tax changes per $1,000 of personal income. This timeframe ensures that tax changes will impact a states ranking immediately enough to overcome any lags in the tax revenue data. Laffer Associates calculations used raw data from Tax Analysts, state legislative fiscal notes, state budget offices, state revenue offices, and other sources. DEBT SERVICE AS A SHARE OF TAX REVENUE Interest paid on debt as a percentage of total tax revenue. This information comes from 2011 U.S. Census Bureau data. These data were released in July 2013. PUBLIC EMPLOYEES PER 10,000 RESIDENTS This variable shows the full-time Equivalent Public Employees per 10,000 of Population. This information comes from 2012 U.S. Census Bureau data. QUALITY OF STATE LEGAL SYSTEM This variable ranks tort systems by state. Information comes from the 2012 U.S. Chamber of Commerce State Liability Systems Ranking.
STATE MINIMUM WAGE Minimum wage enforced on a state-by-state basis. If a state does not have a minimum wage, we use the federal minimum wage floor. This information comes from the U.S. Department of Labor, as of January 1, 2014. WORKERS COMPENSATION COSTS This variable highlights the 2012 Workers Compensation Index Rate (cost per $100 of payroll). This survey is conducted biennially by the Oregon Department of Consumer & Business Services, Information Management Division. RIGHT-TO-WORK STATE (YES OR NO) This variable assesses whether or not a state requires union membership for its employees. We have chosen to score states based on either a yes for the presence of a right-to-work law or a no for the lack thereof. This information comes from the National Right to Work Legal Defense and Education Foundation, Inc. Right-to-work status is as of January 1, 2014. TAX OR EXPENDITURE LIMIT States were ranked only by the number of state tax or expenditure limits in place. We measure this by i) a state expenditure limit, ii) mandatory voter approval of tax increases, and iii) a supermajority requirement for tax increases. One point is awarded for each type of tax or expenditure limitation a state has. All tax or expenditure limitations measured apply directly to state government. This information comes from the Cato Institute and other sources.
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