Study shows states with a high and rising tax burden are driving away individuals and businesses.

A new critique of states’ reactions to the economic crisis, by the American Legislative Exchange Council and Dr. Arthur Laffer, claims that states with a high and rising tax burden are driving away individuals and businesses. Correspondingly, those with lower and falling tax burdens are attracting businesses and spurring job growth.

“Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index” found states that responded to the economic crisis with higher taxes, new spending, and more debt to be even deeper in a financial hole.

The study provided two lead rankings: economic outlook and economic performance.
Economic outlook takes into account 15 state policy variables – pictured right – for which Louisiana improved from 24th in 2008 to 16th in 2011.

California, Illinois, New Jersey, Vermont, and New York were the lowest five in the rankings for economic outlook – in that order – while Utah achieved the highest score, followed by Colorado, Arizona, South Dakota, and Florida.

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