Taxing Analysis
02.16.2012
The Tax Foundation released its latest rankings of state tax burdens today (ABJ report here). Let the silliness begin.
Taxes play a role in corporate and household location decisions, but they get way too much credit.
Here’s how the Tax Foundation’s rankings stack up against other economic indicators:
Taxes = Tax Foundation’s overall index rank, 1 = best
GDP Growth = Real GDP change, 2009-2010
Job Growth = Total nonfarm employment change, December 2010-December 2011
Unemployment = Unemployment rate, December 2011
Income = Median household income, 2010
North Dakota ranked 29th in tax burden, but was first in GDP growth and job growth, and had the lowest unemployment rate. Not bad for a tax climate that ranks in the bottom half of all states.
The Tax Foundation tagged New Jersey with the worst tax climate in the U.S. However, New Jersey came in a respectable 24th on GDP growth, and had the second highest median household income. Apparently not all high income households are packing up and moving to reportedly lower cost states like Texas, despite some claims.
For the wonk-minded, data, rankings, and correlation table linked here (Excel).
Sources: Tax Foundation, BEA, BLS, Telestrian
2 Responses to “Taxing Analysis”
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About Civic Analytics LLC
Civic Analytics LLC is an Austin-based economic research and consulting firm. Brian Kelsey, Principal, blogs here about big data, economic development, and the Austin economy. Views here are his own. Photo credit: Austin Business Journal
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Brian, A great post. Thanks for putting this comparative information together.
Thanks, Anatalio. An economic developer’s job is hard enough. The lack of nuance in these popular rankings can do real harm to perceptions of a community. My goal here was not to suggest that taxes aren’t important, but that more context is needed.