'Live Free or Move'

by Lawrence J. McQuillan and Hovannes Abramyan

Pacific Research Institute May 16, 2006

Jobs are flocking to low-tax states for a reason.

"Voters will elect governors in 36 states this year. And as they decide who to send to the governor's mansion, they will also be shaping the economic future of their state. On taxes, the gubernatorial candidates fall into one of two camps. Either they believe that the best way to close a budget gap is to raise taxes. Or, like Ronald Reagan and George W. Bush have done from the Oval Office, they believe in raising revenue by growing the state's economy with tax cuts."

"Now new data is out and it shows that the states that embraced supply-side tax cuts are not only financially more sound and enjoy stronger economies, but they are draining residents away from the states that opted for high taxes. The Pacific Research Institute has crunched the tax numbers in all 50 states and published the "U.S. Economic Freedom Index" ranking all states according to how friendly or unfriendly their policies were toward free enterprise and consumer choice in 2004--the most recent year that comparative data is available for each state. It's clear that the economic policies of 2004 determined where each state fell in the rankings, and shaped 2005 economic performance."


U.S. Economic Freedom Index: 2004 (Courtesy of Pacific Research Institute)

Note the large red midwest blemish called Illinois surrounded by states with higher Economic Freedom Indexes. Is it any wonder that jobs and residents are fleeing Illinois for any of the 45 other states with greater economic freedom?

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