Striking Correlations Between Income Taxes and Congressional Reapportionment
Only seven states levy absolutely no income tax. According to the U.S. Census data released today, only eight states will see increased congressional representation, which means they have been growing faster than the national average. Four states (Texas, Florida, Washington, and Nevada) are included in both of those lists.
The other three states — as well as New Hampshire and Tennessee, which tax only interest and dividend income — all stayed at the same number of seats. That means their growth was average, or near average.
All 10 states that lost representation have a state income tax.
According to the Tax Foundation, the eight states gaining seats in congress have an average total tax burden — including taxes on income, sales, and property — ranking of 28.3, on a scale where 1 is the state with the highest tax burden and 50 has the lowest. The 10 states losing seats have an average ranking of 20. If you remove Louisiana from the equation, because of its low tax burden and the fact that that state lost a number of residents after Hurricane Katrina, the remaining nine states have a more striking ranking of 16.7.
Another interesting note is that Washington, which gained a seat, has a high total tax burden but no income tax — and only a month ago, that state’s voters soundly defeated a proposal that would have instituted one.
I don’t claim to have demonstrated causation with this brief review of Census data for a blog post. But the noted examples show a striking correlation between lower taxes overall, and especially the lack of income taxation, for population growth. And when populations grow, economies often grow with them.
To read further Show-Me Institute research about to these topics, please visit the taxation section of our main website.
The case of Washington IS interesting.
It would seem that the demographic data, due to be released in February or March, will be more helpful in determining why exactly this is the case. Could it be that people with lower incomes feel more willing and able to have a baby?
Just a thought: The southern states, like Arizona, Florida, and Texas,are likely seeing a growth in population (and therefore Congressional representation) as a result of immigration to the state. Those states that can usually rely on a steady influx of people are likely accustomed to the boom they provide to the local economy. In turn, these states may not feel the need to have a higher income tax as some other states more removed from the border likely do. (It probably helps that these states were not ever traditionally “liberal” as well.) In fact, most of the states on the southern border have a relatively low tax burden, according to The Tax Foundation, which you linked to.
Utah has a very high average family size, compared to the rest of the country, so the growth in population and Congressional representation should be of no surprise.
Just some thoughts to consider. I tried to do a little research, but, like I said, I think the demographic data will lend itself to the strongest correlations.
Comment by D. Amiri — December 22, 2010 @ 9:13 p.m.
Another interesting correlation is that states with low taxes also tend to have lax laws on businesses who hire undocumented immigrants (even if they have strict laws on the immigrants themselves).
Comment by Rob — December 23, 2010 @ 6:53 a.m.