New Report Correlates Bad State Policies with Underperforming Economy

While Democrats in state capitals such as Sacramento and Albany are busy patting themselves on the back for the great job they’re doing, a new report out today puts California and New York at the bottom of the list for economic performance and outlook, casting doubts about prospects for reducing unemployment creating economic opportunities for millions of Americans living in high tax states.

In “Rich States, Poor States,” the American Legislative Exchange Council and well-respected economist Art Laffer examine each state’s economic performance in areas such as GDP, employment, and domestic migration, all factors that are heavily influenced by state policies. Looking forward, they examine factors influencing future economic growth, such as public debt, the tax burden on individuals and employers, and other factors.

California’s economic outlook ranking plunged from #38 in 2012 to #47 today, placing it among the states with the worst economic outlook in the year ahead. Only Illinois (48), New York (49), and Vermont (50) fared worse.

Today’s report demonstrates once again the correlation between bad economic policy coming out of the legislature and fewer economic opportunities for Americans living in states whose capitals are dominated by a high-tax philosophy. New York, California and Illinois underperform compared to other states. In California, we've witnessed a staggering amount of net domestic outmigration: more than 1.5 million people since 2001. Looking ahead, we see that tax and regulatory policies in place today are creating a poor economic outlook which will mean fewer jobs and a smaller tax base to fund important social services.

California’s highly destructive tax system, a major contributor to both tax volatility for the state and pushing employers elsewhere, merited a dedicated chapter in the new report.

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