1. Jonathan Williams
@taxeconomist

2. About ALEC
Founded in 1973
The American Legislative Exchange Council is America’s largest nonpartisan, voluntary membership organization of state legislators dedicated to the principles of limited government, free markets and federalism.
Comprised of nearly one-quarter of the country’s state legislators and stakeholders from across the policy spectrum, ALEC members represent more than 60 million Americans and provide jobs to more than 30 million people in the United States.

3. It’s Been a Long Time Since Federal Tax Reform
Guess the Year…

4. Also from 1986….
H/T: RATE Coalition

5. ALEC Principles of Taxation
Simplicity
Transparency
Neutrality
Predictability
Pro-Growth

6. The Laffer Curve Tax Revenue Tax Rate 100 B Growth Maximizing Point C
Growth
Maximizing
Point C B A

7. Taxpayers Vote with their Feet (2005-2014 Cumulative)
States with Highest In-Migration:
Texas (1,353,981)
Florida (834,966)
North Carolina (641,487)
Arizona (536,269)
Georgia (406,863)
States with Highest Out- Migration:
New York (-1,468,080)
California (-1,265,447)
Illinois (-669,442)
Michigan (-614,661)
New Jersey (-527,036)

8. What Does 100,000 People Look Like?

9. States Slated to Gain (or Lose) Seats in 2020
Winners AZ CO
FL* MT NC OR
TX*
Losers AL
IL* MI MN NY OH PA RI WV

10. Taxpayers Vote with their Feet
States with the Largest Net Loss of Congressional Seats Since 1960

11. California Hawaii Net loss of 1,503,970 people over the last decade
Lost population 8 out of the last 10 years
California
Net loss of 1,503,970 people over the last decade
San Diego’s Avg.
Temperature: 71°
Maui’s Avg.
Temperature: 84°

12. Some Unlucky States Can Expect Even More Out-Migration
A majority of residents in states with the highest taxes would move if given the opportunity
Nearly 50 percent of residents in Connecticut and New Jersey want to leave
42 percent of residents in Illinois, and 41 percent in Rhode Island, want to leave
On average, 36 percent of residents in high tax states want to leave

13. Gross State Product Growth Total State Tax Receipt Growth
The Nine States with the Highest and Lowest Marginal Personal Income (PIT) Tax Rates
Highest PIT
No PIT
Avg. Top Rate: 10.39%
(KY, ME, MD, VT, NJ, CA, OR, HI, NY)
(AK, FL, NV, NH, SD, TN, TX, WA, WY)
46.95%
Gross State Product Growth
59.30%
6.90%
Population Growth
14.60%
54.30%
Total State Tax Receipt Growth
82.00%
4.58%
Job Growth
9.61%
Source: Rich States, Poor States

14. State Tax Revenue Volatility

15. Special Carve-outs Undermine Tax Neutrality
The Unseen Costs of Tax Cronyism: Favoritism and Foregone Growth
An effective tax system should be broad based and utilize a low overall rate with few loopholes
In the most recent year in which each state published their respective tax expenditure reports, the sum of tax carve-outs was as follows:
$228 billion for personal income and businesses earnings tax exemptions
$260.1 billion in sales tax exemptions

16. Tax Cronyism in the States
Top 5 states with the highest number of specific grants to companies
New York – 52,132
Michigan – 11,747
Washington – 10,528
Oregon – 10,027
New Jersey – 7,335
U.S. Total (including the District of Columbia) – 157,072
Time period is approximately from 1989 to 2012

17. The Best of the Best: 10 Highest Ranked States in 2017
1. Utah
2. Indiana
3. North Carolina
4. North Dakota
5. Tennessee
6. Florida
7. Wyoming
8. Arizona
9. Texas
10. Idaho

18. The Worst of the Worst: 10 Lowest Ranked States in 2017
50. New York
49. Vermont
48. New Jersey
47. California
46. Connecticut
45. Minnesota
44. Illinois
43. Hawaii
42. Maine
41. Oregon

19. Georgia 2017 Economic Outlook Rank: 17 Highlights Lowlights
No Death Tax
Right-to-work state
Low Remaining Tax Burden
Lowlights
Recently Legislated Tax Changes
Lack of Tax or Spending Limitations

20. Georgia’s History in Rich States, Poor States
17th is Second Worst Score in 10 Years of Report
Only Georgia’s Third Year Outside of Top 10
Why?
States can fall behind, simply by standing still…

21. Rich States, Poor States: A Website
What’s your state ranking? Digitally dive into the comprehensive report on economic competitiveness of the states to find out.
Compare states to see which policies work and which do not.
Explore the 15 policy variables affecting Economic Outlook and the 3 measures of Economic Performance.
Can you make your state more competitive? Use the “Adjust Policies” tool to see how adjusting policies alter your state’s Economic Outlook ranking.
Read the latest news on economic policy and competitiveness in the states.

22. Go Deeper on Policy – Improve Your Ranking

23. Don’t Just Take My Word For It…
“I’ve raised taxes multiple times. It’s not working. And it’s come up a cropper… Spurring economic growth is what’s necessary.”
--CT Governor Dannel Malloy
Source:

24. Finally, A Public Service Announcement

25. Center for State Fiscal Reform Twitter: @TaxEconomist
Jonathan Williams
ALEC Chief Economist,
Vice President,
Center for State Fiscal Reform
Phone: (202)