Prosperity Reigns in Right to Work, Low Tax States

According to the March 29th Richard Rahn (Newsmax) article, Right to Work and Lower Taxes appear to deliver a one-two punch in states fights against unemployment and personal income decline.  In fact, Right to Work states lead in economic prosperity and personal income growth.

State Economic Climate

Economic Performance Ranking
Business Tax Climate Ranking
Small Business Survival Ranking 2011 Population Growth 2000-2010 Right to Work
Florida 5 5 6 17.6% Yes
Virginia 8 12 14 13.0% Yes
Tennessee 10 27 11 11.5% Yes
Texas 19 13 3 20.6% Yes
California 46 49 48 10.0% No
New Jersey 48 48 50 4.5% No
New York 50 50 49 2.1% No
Sources: American Legislative Exchange Council, Tax Foundation, Small Business and Entrepreneurship Council, U.S. Census Bureau, National Right to Work Legal Defense Foundation.


From Rahn’s article:

“Fiscal crisis hits the states” has become this year’s most boring and repetitive headline. But what is largely overlooked is that some states are doing relatively well — such as my home state of Virginia — and are, in fact, balancing their budgets without draconian budget cuts or tax increases.

Given the ongoing fight between public-employee unions and some state governors, it is interesting to observe that the “right to work” states (that is, those states where workers are not forced to join a union against their will in order to obtain a specific job) also had much better performances than in those states where workers are not protected from involuntary unionism.

Likewise, the 10 states with the lowest tax burden as a percentage of personal income had personal income growth that was about 17 percent higher than the 10 states with the highest tax burden.Government services often are worse in the high-tax states than in low-tax states. The evidence indicates that high taxes are the problem, not the solution.

The state of Virginia is usually ranked at the top or near the top of the “best managed” states. Virginia’s budget is balanced (as required by the state constitution), the tax burden is moderate, the service delivery tends to be well above average for a government service, and there is almost a total absence of corruption by government officials.The Virginia state legislature meets only 45 days on odd-numbered years and 60 days on even-numbered years — so much for the myth that you need full-time state legislators as most states unnecessarily have in order to conduct the people’s business.