Jonathan Williams @taxeconomist

About ALEC Founded in 1973 The American Legislative Exchange Council is America’s largest nonpartisan, voluntary membership organization of state legislators dedicated to the principles of limited government, free markets and federalism. Comprised of nearly one-quarter of the country’s state legislators and stakeholders from across the policy spectrum, ALEC members represent more than 60 million Americans and provide jobs to more than 30 million people in the United States.

It’s Been a Long Time Since Federal Tax Reform Guess the Year…

Also from 1986…. H/T: RATE Coalition

ALEC Principles of Taxation Simplicity Transparency Neutrality Predictability Pro-Growth

The Laffer Curve Tax Revenue Tax Rate 100 B Growth Maximizing Point C Growth Maximizing Point C B A

Taxpayers Vote with their Feet (2005-2014 Cumulative) States with Highest In-Migration: Texas (1,353,981) Florida (834,966) North Carolina (641,487) Arizona (536,269) Georgia (406,863) States with Highest Out- Migration: New York (-1,468,080) California (-1,265,447) Illinois (-669,442) Michigan (-614,661) New Jersey (-527,036)

What Does 100,000 People Look Like?

States Slated to Gain (or Lose) Seats in 2020 Winners AZ CO FL* MT NC OR TX* Losers AL IL* MI MN NY OH PA RI WV

Taxpayers Vote with their Feet States with the Largest Net Loss of Congressional Seats Since 1960

California Hawaii Net loss of 1,503,970 people over the last decade Lost population 8 out of the last 10 years California Net loss of 1,503,970 people over the last decade San Diego’s Avg. Temperature: 71° Maui’s Avg. Temperature: 84°

Some Unlucky States Can Expect Even More Out-Migration A majority of residents in states with the highest taxes would move if given the opportunity Nearly 50 percent of residents in Connecticut and New Jersey want to leave 42 percent of residents in Illinois, and 41 percent in Rhode Island, want to leave On average, 36 percent of residents in high tax states want to leave

Gross State Product Growth Total State Tax Receipt Growth The Nine States with the Highest and Lowest Marginal Personal Income (PIT) Tax Rates Highest PIT No PIT Avg. Top Rate: 10.39% (KY, ME, MD, VT, NJ, CA, OR, HI, NY) (AK, FL, NV, NH, SD, TN, TX, WA, WY) 46.95% Gross State Product Growth 59.30% 6.90% Population Growth 14.60% 54.30% Total State Tax Receipt Growth 82.00% 4.58% Job Growth 9.61% Source: Rich States, Poor States

State Tax Revenue Volatility

Special Carve-outs Undermine Tax Neutrality The Unseen Costs of Tax Cronyism: Favoritism and Foregone Growth An effective tax system should be broad based and utilize a low overall rate with few loopholes In the most recent year in which each state published their respective tax expenditure reports, the sum of tax carve-outs was as follows: $228 billion for personal income and businesses earnings tax exemptions $260.1 billion in sales tax exemptions

Tax Cronyism in the States Top 5 states with the highest number of specific grants to companies New York – 52,132 Michigan – 11,747 Washington – 10,528 Oregon – 10,027 New Jersey – 7,335 U.S. Total (including the District of Columbia) – 157,072 Time period is approximately from 1989 to 2012

The Best of the Best: 10 Highest Ranked States in 2017 1. Utah 2. Indiana 3. North Carolina 4. North Dakota 5. Tennessee 6. Florida 7. Wyoming 8. Arizona 9. Texas 10. Idaho

The Worst of the Worst: 10 Lowest Ranked States in 2017 50. New York 49. Vermont 48. New Jersey 47. California 46. Connecticut 45. Minnesota 44. Illinois 43. Hawaii 42. Maine 41. Oregon

Georgia 2017 Economic Outlook Rank: 17 Highlights Lowlights No Death Tax Right-to-work state Low Remaining Tax Burden Lowlights Recently Legislated Tax Changes Lack of Tax or Spending Limitations

Georgia’s History in Rich States, Poor States 17th is Second Worst Score in 10 Years of Report Only Georgia’s Third Year Outside of Top 10 Why? States can fall behind, simply by standing still…

Rich States, Poor States: A Website www.RichStatesPoorStates.org What’s your state ranking? Digitally dive into the comprehensive report on economic competitiveness of the states to find out. Compare states to see which policies work and which do not. Explore the 15 policy variables affecting Economic Outlook and the 3 measures of Economic Performance. Can you make your state more competitive? Use the “Adjust Policies” tool to see how adjusting policies alter your state’s Economic Outlook ranking. Read the latest news on economic policy and competitiveness in the states.

Go Deeper on Policy – Improve Your Ranking

Don’t Just Take My Word For It… “I’ve raised taxes multiple times. It’s not working. And it’s come up a cropper… Spurring economic growth is what’s necessary.” --CT Governor Dannel Malloy Source: http://www.ctnewsjunkie.com/archives/entry/malloy_forum_highlights_stakes_of_budget_battle/

Finally, A Public Service Announcement

Center for State Fiscal Reform Twitter: @TaxEconomist Jonathan Williams ALEC Chief Economist, Vice President, Center for State Fiscal Reform Phone: (202)-557-8484 Email: jwilliams@alec.org Twitter: @TaxEconomist