Some Americans think state boundaries and the principle of federalism are outdated relics from the past. They couldn’t be further from the truth.
New data in a report from the American Legislative Exchange Council (ALEC) paint a clear picture: States with the best policies are being rewarded with an influx of residents, and states with unattractive policies are losing residents.
Take two of the most high-tax, high-spend states in the union: New York and Illinois.
Over the past decade, New York has suffered a net loss of nearly 1.5 million residents and over 650,000 Illinoisans have moved elsewhere. Meanwhile, Texas, a right-to-work state with no income or estate tax, saw its population grow by 1.3 million.
Despite their appealing metropolitan hubs, New York and Illinois are shedding denizens.
States that scored high on the ALEC-Laffer State Economic Competitiveness Index, which takes into consideration 15 variables from the number of public employees to sales tax rates, have seen an influx of job-creating companies and taxpaying citizens over the last decade, while low-scoring blue states have been losing both.
While tax rates and labor laws are not the only factors that contribute to a state’s flourishing, the correlation between sound economic policy and private sector growth is clear.
The formula is simple. Good policy contributes to vibrant economies, and vibrant economies attract people eager for opportunity.