I’m researching why New York City’s population has declined over the last few years, and ultimately, I think a lot of it has to do with remote work. Many people moved back to live near their families when they could, yet New York still has one of the highest costs of living in the United States, at least if we think people spend 100% of their income on housing.
But the biggest reason the right wing media says people are fleeing from oppressive high tax states is because Republican states have much lower taxes. Let’s analyze that data by using ITEP.
I just graphed the rate for the lowest taxed quintile as found by ITEP against the Cook Partisan voting index. A negative PVI is Republican, a positive PVI is Democrat.
With an R squared of 0.01, there is no correlation between tax rates and partisan affiliation. Pennsylvania is the highest-taxed state, with a Cook Partisan voting index of R+2. Wait? R+2? I thought Republicans were low tax states?
Despite what some media outlets would want you to believe, Republicans controlled the state legislature of Pennsylvania from 2010-2022. They even had a trifecta from 2011-2014. Despite this trifecta, Pennsylvania is the HIGHEST TAXED STATE IN THE COUNTRY.
Delaware is our lowest-taxed state, with a PVI of 7. It is strongly Democratic and has the lowest tax bracket of 0.08. Delaware has not had a Republican governor since the 1980s, and there has been a Democratic trifecta since 2009. So, if you want to live in a low-tax state, move to Delaware!
Illinois, Hawaii, New York, and Washington are the next high-tax states. These are all Democratic states, but only New York has a progressive tax code. Washington has no income tax.
The next low-tax states are Alaska, New Hampshire, Montana, and Idaho. If you don’t want to tax your citizens directly, focus on resource extraction. All of these states are highly regressive.
But if we focus instead by looking at tax rates on tax brackets, we start to see a pattern.
States with more progressive tax codes tend to be Democratic, while states with more Regressive tax codes tend to be controlled by Republicans.
Now, we see the real differences in tax codes between states. Almost every state taxes someone above 10%, regardless of political affiliation.
A final note, if your state is not blessed to have abundant black lung and cancer, I mean oil and coal, New Hampshire is a model for you. Let’s investigate… According to The Urban Institute:
New Hampshire’s largest spending areas per capita were elementary and secondary education ($2,380) and public welfare ($2,201). The Census Bureau includes most Medicaid spending in public welfare but also allocates some of it to public hospitals. Per capita spending is useful for state comparisons but is an incomplete metric because it doesn’t provide any information about a state’s demographics, policy decisions, administrative procedures, or residents’ choices.
New Hampshire’s per capita income (per the Bureau of Economic Analysis) was $74,663 in 2022, ranking seventh among the states. It was above the national average of $65,423, but below the New England regional average of $76,651. The state’s median household income (five-year estimate) was $90,845 in 2022, ranking sixth among the states and above the national average of $75,149. New Hampshire’s poverty rate was 7.3 percent in 2022 (five-year estimate), below the national rate of 12.5 percent.
New Hampshire also has above-average corporate income taxes.
So invest heavily in education, become rich, tax corporations, be small, embrace the Medicaid expansion, have a low poverty rate, and you can have low taxes? That’s the New Hampshire model.