- They ranked the fiscal status of each state and state government along five criteria.
- Government numbers and data were used to analysis the five criteria included such fiscal tasks as a state’s ability to pay its short term bills, meet longer term financial obligations and liabilities such as pension and healthcare expenses, budget management, service-level solvency measures a state’s ability to respond to a demand for increased spending, and trust fund solvency measures unfunded pension liabilities and state debt.
These states, with the exception of Kentucky, have been operated by Democrats for the longest time. Residents in these states are most likely to see their taxes go up in the future, and their freedom levels go down, since these states are most likely to need additional tax revenue to cover the failed financial management skills of the mostly Democratic state politicians. As we said above, as taxes go up, your freedom of choice for everything from your kids’ schools to your vacation experiences goes down.
Let’s move from the numbers that describe the financial health or sickness of each state and see how each state compares from a taxation perspective. One could make the argument that the reason that the above financial distressed states are in the condition they are is because they tax their residents at very low levels, depriving the state government of tax revenue. Conversely, the financially healthy states may be that way because they place the heaviest taxation burden on their residents, reducing their freedom.
Well, you could make that argument but you would probably be wrong. According to the numbers from the financial advising website, Wallethub, using statistics and numbers from Statista, believe it or not, the above states that are the financial soundest also have considerably LOWER taxes than the states above that are the least financial sound. Let’s see where the above financially sound states rank when it comes to the local and state taxation burden:
Lower taxes means more financial integrity in the state government. Who knew? Many of the states in the worst financial shape ask their residents to pay a whopping ten percent or so of their household income to state and local taxes in addition to their Federal income taxes, Social Security taxes, and Medicare taxes. Tough to say you live in a freedom loving state when the various levels of government decimate your income with little societal benefit in return.
So our preliminary analysis of the numbers leads us to conclude that: low taxes = fiscally sound states and state governments. And low taxes also means more freedom and liberty for the residents of those fiscally sound states. Simple logic, solid numbers to support it. Tomorrow, we will continue this number analysis by looking at another measure of state by state financial shape and state by state migration to see if fiscally sound states with low taxes, as we proved today, also increases the wealth and sheer numbers of state residents.
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