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Report: Red States Have the Best Economies

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Report: Red States Have the Best Economies

Utah, Florida and Oklahoma – states that favor low tax and spending policies – come out on top in the latest ALEC-Laffer State Economic Competitiveness Index released on Wednesday.

States that fare the worst – New York, Vermont and New Jersey – are those that have high state income taxes and large government-funded programs, according to the “Rich States, Poor States” report from the American Legislative Exchange Council, a conservative think tank.

One component of the index, the economic outlook ranking, evaluates states based on 15 factors that are closely influenced by state policies. “Generally speaking, states that spend less — especially on income transfer programs — and states that tax less — particularly on productive activities such as working or investing — experience higher growth rates than states that tax and spend more,” the report notes.

The index is named for Arthur Laffer, who rose to prominence as a key economic adviser to former President Ronald Reagan. He is credited with the economic theory known as the Laffer Curve, which argued that lower tax rates could bring in more revenue as they spur economic growth. Others who authored this report include Stephen Moore, a co-founder of The Club for Growth and economic adviser to former President Donald Trump, and Jonathan Williams, chief economist for ALEC.

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