I periodically share persuasive images, accompanied by “a picture says a thousand words.”
- The failure of government schools
- Obama’s grim employment data
- Inefficient and excessive welfare
- More capital means higher wages
- Protectionism breeds corruption
Today, let’s add to the collection with this image from the Committee to Unleash Prosperity that compares twenty states, all of which had no income tax back in 1960.
The red line shows the share of U.S. income earned in 11 states that imposed income taxes at some point after 1960. The blue line shows the share of U.S. income earned in the 9 states that have avoided that mistake.
The changes in relative prosperity are amazing (and confirm some research I shared in 2012).
To be sure, there are many policies that determine long-run growth, so the above chart is not just about state income taxes.
But fiscal policy and income taxes are important when comparing states, as shown by Freedom the 50 States, Economic Freedom of North America, and the State Tax Competitiveness Index.
And, just as is the case with my Anti-Convergence Club, it’s very powerful when you use decades of data to show a trend.
P.S. I’ve warned for years about the risk of a state income tax in the state of Washington. Sadly (but predictably), the politicians are ignoring my advice.
P.P.S. Mississippi is trying to join the blue-line states. Let’s hop they do what is necessary to make that happen.