The Entire Nation Should Be Modeled After Arizona

By Shoshana Weissmann

No state in America has enacted ideal policy across-the-board, but other states could take a lesson from one state in particular. Hint: It’s not New York, where Bloomberg bans soda from being sold in certain ways. It’s also not D.C., where plastic bags are taxed.

Other states need to model their policy after that of Arizona. According to Freedom in the 50 States (a project of the Mercatus Center at George Mason University), Arizona is the 11thfreest state in America. The calculation of freedom used encompasses a variety of components under the categories of fiscal policy, regulatory policy, and personal freedom.

Freedom in the 50 States points out that Arizona’s freedom is on the upswing. In regard to fiscal policy, Arizona has notably low taxes (8.5% of personal income). Furthermore, government spending and employment are better than average. However, the state does have high government debt. Arizona’s regulatory policy is largely conducive to freedom. It even has a lawrequiring “compensation for regulatory takings.”

The state has recently gone through some substantial eminent domain reform. Arizona is also home to right-to work laws and few price controls on various types of insurance. Its personal freedom rank is heightened by its relaxed gun control, alcohol, and education laws and regulations. However, smokers are disenchanted by high cigarette taxes and stringent smoking bans. Freedom in the 50 States recommends that Arizona reduce its debt, reduce certain educational and licensing requirements, and “reform sentencing policies for nonviolent offenders.”

According to How Money Walks by Travis H. Brown, Arizona is doing incredibly well. People and money are migrating to the Grand Canyon State. Brown’s project uses data from the IRS to explore how and why people and money migrate, to and from where they migrate, and what this means more broadly. Brown suggests “the key to accumulating working wealth for any state is a pro-growth tax policy, and that means not taxing personal income.” The map reflects high rates of migration away from states with crushing taxes and towards those which are conducive to economic prosperity. The positive effect of Arizona’s low income taxes is reflected in the interactive map. Brown also points out a few key facts:

The nine states with no personal income taxes gained $146.2 billion in working wealth. The nine states with the highest personal income tax rates lost $107.4 billion. The 10 states with the lowest per capita state-local tax burdens gained $69.9 billion. The 10 states with the highest per capita state-local tax burdens lost $139 billion.

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