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Financially Healthy States Lean Right, Have Low Taxes

August 28, 2017

The Mercatus Center at George Mason University aims to “bridge the gap between academic ideas and real-world problems.” Last month, the organization released its report ranking all 50 states on their fiscal health. It examined which ideas are working, which ones aren’t, and the resulting financial conditions left in the wake.

The comprehensive study weighs short- and long-term debt, unfunded pensions, healthcare benefits and more to determine a state’s score. The bookends are Florida (#1) and New Jersey (#50). Here’s the full ranking:

The simple takeaways are the most fiscally sound states are all low-tax, Republican strongholds, and the least 10 solvent states are all high-tax areas that lean heavily Democratic. Digging a bit deeper, only one of the worst states has a tax burden below 8 percent (Louisiana). Not one of the best has a tax burden above 9.6 percent.

To cover recent budget shortfalls, some states have raised taxes, my home state of Pennsylvania included. But the Mercatus Center report discusses how that could be hurtful over time. And based on this ranking, it’s easy to see how that can be true. All in all, this report is a powerful message for conservatives – and an alarming one for liberals. We’ll have to wait and see if it translates to future ballot boxes.

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