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Vote With Your Feet: Free States Are Happier & Richer
Submitted by Gabriel Openshaw via The Mises Institute,
The greater the economic freedom, the wealthier and happier the people.
From minimum-wage laws to higher progressive taxation to greater unionization to larger welfare programs to more regulation, left liberals demand a stronger and more economically active central government. Advocates of laissez-faire, on the other hand, favor smaller government, less regulation, lower taxes, and greater individual opportunity and property rights.
But which economic policy approach actually yields the best results?
We’ve already clearly demonstrated — via international and US state migration rates — that people the world over are naturally drawn toward greater economic freedom. Across countries, and even across states, millions of people every year migrate away from greater taxation and more regulation and toward lower taxation and less regulation. But are they better off?
Yes.
Let’s take a look at the fifty US states, ranked by their level of economic freedom. The most highly-ranked states have lower tax burdens, deference to property rights, less government spending, and labor market freedom:
Taking into account cost-of-living differences, the top ten most economically free states have an average $52,334 median household income, which is considerably higher than the $43,090 median income for the ten least free. That’s a 21 percent raise for workers by switching state government policies to a smaller government approach. How much more could it be increased if the same were done at the national level?
The observed results are not a question of race or country of origin: African-Americans, Hispanics, Asians, and immigrants also earn substantially more in the more economically free states. While left liberals should be lauded for their apparent concern for the welfare of minorities, the truth is that their policies yield the worst results for them, a standard of living pay cut just for living in a more regulated and heavily taxed state.
One may think that this could be driven by urban vs. rural states more than policies, but the top ten free states are 71 percent urban vs. 72 percent for the bottom ten — a negligible difference. Moreover, the states in between the two are even more urban, at 75 percent, which effectively rules out correlation.
Another objection may be that “the rich” or “the 1 percent” are skewing the numbers — that income inequality is running rampant with less government to level the playing field, as many persistently believe. The exact opposite is the case.
Using median incomes as the measure (instead of average incomes) effectively eliminates the impact of the very wealthy on the numbers. And the “Poverty Measure” is lower in the most free states (13.3 percent) than in the least free (15.1 percent).
But the real measure of income inequality is the Gini index, and we can put aside for now the fact that median incomes are a far better measure of overall economic well-being than inequality of incomes (i.e., 100 people making $1 a day are perfectly equal but not better off than ninety-nine people making $2 a day and 1 making $5 a day, despite the latter’s higher inequality).
If we assume inequality to be an important economic measure instead of a normal byproduct of economic growth, the most free states do better, with a .446 Gini index vs. a higher and less equal .462 Gini for the least free states. Not only that, but the rate of growth of inequality over the past forty years is lower in the most free states compared to the least free: 22 percent vs. 30 percent. In other words, heavier government involvement has led to more income inequality and faster growth of such, while less government has created a more equal growth in incomes.
A final argument might be that while there may be greater income in more free-market states, the increased government regulation and intervention provides greater care and increases the population’s happiness and well-being. But the opposite is the case.
Gallup publishes an annual Well Being Index, which measures and ranks each state’s population across five core measures of well-being:
- Purpose (liking what you do each day and being motivated to achieve your goals)
- Social (having supportive relationships and love in your life)
- Financial (managing your economic life to reduce stress and increase security)
- Community (liking where you live, feeling safe, and having pride in your community)
- Physical (having good health and enough energy to get things done daily)
Averaging each state’s Wellness rank for the past seven years we find that states with greater economic freedom also bring greater happiness and well-being.
So what happens when you create a more laissez-faire and libertarian environment where people make more money, have less poverty, and find greater happiness in their lives? People want to move there. And indeed, looking at state-to-state migration of Americans between 2006 and 2010, we see a net migration flow of 704,000 from the twenty-five least economically free states to the twenty-five most economically free. That’s hundreds of thousands of Americans choosing to relocate away from more interventionist government to more free market oriented government.
Political Party Just One Factor
On that latter point, it’s important to distinguish small-government ideology from Republican party control in a state. While it’s true that there’s a strong correlation between Republicans and economic freedom — the ten most free states had a Partisan Voter Index (PVI) average of R+10.3 vs. D-6.1 for the ten least free — it’s not a perfect correlation either. Two of the top ten states (Virginia and New Hampshire), for instance, are swing states, and two of the bottom ten economically free states (West Virginia and Mississippi) are solidly Republican.
It’s also worth noting what economic freedom is not: it is not corporatism or crony capitalism, where the government bails out banks and subsidizes politically connected businesses, which both major political parties are heavily guilty of. Rather, it’s smaller, less intrusive government.
The reality on the ground is that states with more libertarian free market policies enjoy better results: greater median incomes, a more equitable distribution, less poverty, greater success for minorities and immigrants, and higher overall levels of happiness and well-being. In the political rhetoric landscape the battle of ideology is fierce and filled with demagoguery; in the real world the difference in results between competing economic policies are strikingly clear.
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So basically move where there are no liberals.
Sounds like a description of China.
So moving from one state to another buys you small single digit percentage differences. Small potatos, just enough to prove the point.
What do you think would happen if we shrank the FEDERAL government (the big dog when it comes to regulations and taxes) by, say, half?
I suspect the difference would be more than just a couple percent. Sadly, it's going exactly the opposite way with no end in sight.
Federal Income Tax (a sin in my opinion) is between 25-33% for most people. No avoiding it if you live in the USA, and you're still fucked if you want to hike it to nearly any (other?) civilized country.
State income taxes, for the most part, are between 0-5%. Few exceed that. The Dakotas do have their appeal for me though. Question is: how soon before they're flooded with "migrants" and "asylum seekers?" from the M.E. and sub-70 IQ chaos-causers from Africa?
As soon as the feral gov. finds out that YT's moving there to escape.
Bullshit!
What about places that have NO freedom and government runs everything?
North Koreans are the happiest people in the world! The North Korean government said so!!!
With the short summers and long, brutal winters there won't be hoards rushing in any time soon.
North Korea or North Dakota?
WIth oil in the toilet it seems that North Dakota is seeing an exodus of once high paid workers......
"Federal Income Tax (a sin in my opinion) is between 25-33% for most people."
I don't believe that. I'm easily in the middle class income range, I do not itemize deductions, and I have zero tax credits, and have have zero pre-tax 401k contributions. My effective income tax rate last year was 18%.
Add in payroll and Medicare taxes and I don't even want to think about it. Thieving scum.
I think income taxes are evil, but not as evil as property taxes. Property taxes should be abolished.
There's an awful lot of Swedes up there. And you know the Swedes are infected with this genetic mutation called suicidal altruism.
Sweden is showing their American brothers the way.
Use caution when re-locating near suicidal altruists.
The least-free states pay the best welfare. If you don't want to work go there.
Exactly, No Debt. You gain a paltry fraction of a percent by moving to a state where the people are the extras from "Deliverance", the schools teach creationism, and people have sex with their sisters. Not a good tradeoff.
I almost bought a farm in Aroostook County in Maine for a getaway. A drive up there changed my mind. The "potato people" are scary inbred and highly hostile to anybody that isn't from there. Also, the schools are primitive, and society as we know it is absent.
Where is the great state of Texas?
S/
Small "L" I take it ;-)
the fewer liberals, the less human poop on the sidewalk. correlation 0.99, at least.
How can one escape them? They voted for welfare policies up north for decades. When their taxes went sky high, they moved down south to get away. Unfortunately, they bring their insanity with them! I've witnessed it first hand. Also, I watched them vote for the Obamination. Any country that votes for such is beyond hope. End the FED, let them starve to death. Reset.
That's why New Hampshire is not going to be on that list very long. There is a constant flow of Massholes moving there from their ruined shithole of a commonwealth.
Same issue that you've mentioned. Like locust they destroy one area and move to the next. Also like insects they lack the capacity for learning. They cannot see the cause and effect.
I think states should also have the concept of citizenship and require a 5 year wait period before granting it.
That way if some leftist dolt moves from California to Arizona they have 5 years of experience living there before being allowed to join the political process.
Maybe observing for those 5 years will help them see the light. It would also prevent college students from voting (those in college from another state)
FUCKING......BULLLLLLLL SHIT !!!
Those numbers are HIGHLY....HIGHLY....skewed due to wage disparities between what the 1% and even .1% make and what us grunts make on the ground in these states.
And let me tell you.....at least here in Florida ( that should have beat Georgia for Christ's sake ) the median income gets you an Earned Income Tax Credit ( PC way of saying welfare ) and Food Stamps.
I know from first hand experience for a time. There is NOBODY.....repeat....NO BODY that is happy at 50,000.
Just keep the liberals where they live now. Don't allow the cancer to spread.
Governors Moonbeam and Cuomo! BUILD THAT WALL!
Keep the sickos in your own states, thank you very much.
I hope people don't confuse libertarian with republican. Some of those bottom ten have republican governors.
I actually admire the research that goes into CNBC's top states for business and the only two repeats from their top ten to this list are North Dakota and Utah. I wonder if, with the the total implosion of the oil industry in ND, that state would still rank as high next year. And who the hell wants to live in Utah? Complete silliness.
In Utah - you pretty much have to be a Mormon. Their business ethics are often seriously F'ed up. Texans are also often lousy to do business with.
You're never free in the USSA.
I can vouch for the first five being realativly nice places to be as far as .gov. Some of the last five not so much. NH and AZ are cool but VA,UT and GA SUCK. each his own
If you want freedom Utah is not the place to go.
Id be interested in how they determine 'freedom'. Ive lived in a few on the list and a few off. The free-est state from my experience would probably be NC and it didnt make the list. Utah has an absurd number of weird mormon laws (even if they arent all enforced, theyre legal), VA shouldnt need an explanation.
Go where's it's cold. Fuck Em all.
I totally support the Free State Project because its all about voting with your feet, the best and only real way to vote in the modern age. New Hampshire is the best option, but Costa Rica and Singapore are also okay. Puorto Rico has an awesome tax haven system for wealthy Americans.
I'd believe this more if we didn't have 0% unemployment in Silicon Valley and I've never made more money.
Seeing Hawaii @ #47 makes sick. I love the place but abhor the politics there. Uber liberal, corrupt, lots of cronyism and general govt regulation bullshit if you want to start a business there.
I live in #47, a banana republic on steroids.
As soon as Texas, or some other state seceds, then I'm gone.
"The most highly-ranked states have lower tax burdens, deference to property rights, less government spending, and labor market freedom"
#41 Mississippi? Really? Motherfucker, I am a refugee from Rhode Island, New York and New Jersey. I went to a top ten law school, and spent my whole life studying the Constitution, Markets, and the law. This is God's country. In my new home of Mississippi I can do whatever I want. I don't have to worry when a cop comes up to me, he's more likely to get into an involved arguement about why my concealed carry isn't his favorite rather than treating me like some terrorist. I can take my dog to the beach, drop a trailer on my property, anything, how the fuck do you get off telling me this is the land of economic serfdom? Hey, if you idiots believe that bullshit, stay up in the upper coastal lattitudes and keep sucking the government's dick.
Just because this is generally a good website doesn't mean this article isn't full of shit.
As someone who was born and raised in Mississippi (1964-1992) and has lived in Florida since 1994......( Jeebus...I can't believe I am about to say this ).....I'm seriously thinking about moving back.
But there are certain places that definitely suck more than others.
Like Ole Miss. ( Sorry.....Mississippi State Alumni ) ; )
Love how some clown downvoted you.
I just moved to TN last year and it's great, big difference form NC.
Put me in the Gosh dang 49th state and meanwhile you have tear gas spraying drones up there in your number 1 or number 2 state. I go jogging in 68 degree weather along the ocean with no people around, whole F'n place to my self practically with dolphins spoutin 100 yards away from me and your number 1 and number 2 states are frozen F'n tundra. Lets talk here real California women versus the Dakota oil whores and on and on. What the hell is this guy trying to say.
You have no idea how right you are. If you think the whores are bad you should see the locals, you can't get your haircut unless you want to leave looking like Helen Degeneres. Trust me, you don't want to ever go there and I could give you a 4 hour dissertation on why, no amount of money is worth it.
Please stay there.
I on the other hand had a choice between job offers in California and Florida. California was offering 22% higher salary. I chose Florida very easily.
California has high income tax and Florida has none. California has higher sales tax than Florida. California has higher gasoline prices than Florida.
As bad as some of the politicians from Florida , California has the real nutjobs.
With any luck cali will have a chile type earthquake event, then he will be able to swim with his dolphins...
People do vote with their feet, but sadly, they immediately vote at the ballot box... for exactly what they fled.
http://incapp.org/blog/?p=2621
The whole country is less free.
http://www.thedailysheeple.com/new-data-reveals-u-s-far-from-freest-coun...
New Data Reveals US Far From Freest Country in the World
At the top of the list was Hong Kong, followed by Singapore, New Zealand, Switzerland, United Arab Emirates, Mauritius, Jordan, Ireland, and Canada. The United Kingdom and Chile tied at #10. The United States followed behind at #16, continuing a downward trend that has grown for several years.
Americans are woefully ignorant about what goes on in the rest of the world. They still believe America is #1.
"They still believe America is #1."
You're wrong! The US is becoming the #1 wealthfare/socialist nation in the world (/sarc but not really, since it true)
Although their residents don't want to admit it, all of the Red states except Texas receive more money from Washington, DC than they pay in. The Blue states are supporting them. In other words, the Red States are on welfare. Texas avoids that by being able to pump money out of the ground, not because of any government policies or personal character superiorities.
It's funny how all the people who live in these states and brag about their freedom are being subsidized by the states they disparage. Knda like the guy living free in his parents' basement badmouthing his parents.
You can see that within states too. In Washington State for example the west is blue, cental and eastern are red. The biggest employer in eastern Washington is the state and then hospitals which are flooded with people on Washington State medical coverage (covers everything if your poor, or at least it used to). The eastern area has tons of people on welfare. Ironically Eastern Washington wants the welfare to end and Seattle perpetuates it.
Based on your description, Western North Carolina sounds a whole lot like Eastern Wasthington.
The fullest parking lots (employee lots) with the fanciest cars are at the following:
Most of what's left is on welfare, food stamps, medicaid; majority white. There is a Walmart, Lowes, Autozone, Chilis, and other fast food so some folks still have 'jobs'. There are a lot of self-employed 'disabled' men doing various manual labor jobs. In fact there's such a surplus of skilled labor here (and an abundance of vibrant hispanic immigrants) that most blue collar jobs pay $10/hr. Ever try living on that?
And the scores of abandoned factories are the perfect accompaniment and underscore the level of economic devastation that's taken place here since NAFTA.
Here's a very long list of abandoned factories, as of year 2005, as recorded by a local journalist. Read it and weep. And that's just one county with a population of about 50k.
http://remembercliffside.com/history/the_county/courier_series/courier_t...
Perot was right and I learned it first hand when the sewing factory where I got my first post college job in MS, closed, moved to Mexico and laid off 500 people, all for a few dollars more in profit. 1993.
NAFTA! AMERICA! FUCK YEAH!
I just returned from Hong Kong last week. Every American should visit it to see how hard working people can get along and prosper. Companies flock from all over the world for the opportunity to conduct business freely and make money.
No effing way that any of these statistics are right. There are lies, damn lies, and statistics.
As far as median household income statistics are concerned, it should be noted that Asians “are more likely than the general public to live in multi-generational family households. Some 28% live with at least two adult generations under the same roof, twice the share of whites and slightly more than the share of blacks and Hispanics who live in such households.”
http://www.pewsocialtrends.org/2012/06/19/the-rise-of-asian-americans/
Then there’s this from the NARs’ Economists’ Outlook (April 8, 2014):
Did you know: “Typical” income for a household or family varies based on the type of family you’re interested in describing.
Typical income can be measured in a variety of ways. Analysts often use median household income to indicate what is typical. In 2012, data showed median household income was $51,371 in the US. For families, median income in the US in 2012 was $62,527 [1].
This may have you wondering, “What’s the difference?” The Census Bureau provides these two data points and has a concise explanation on the FAQ page for one of their surveys [2]: “A family consists of two or more people (one of whom is the householder) related by birth, marriage, or adoption residing in the same housing unit. A household consists of all people who occupy a housing unit regardless of relationship. A household may consist of a person living alone or multiple unrelated individuals or families living together.” …
For households, the impact is most seen between 1 and 2-person households. Median income for a one-person household is $27,237 while typical income for a two-person household is $58,121. Median income rises as household size increases, peaking at 4-person households with a median income of $75,343. For 5 or more person households, median income ranges from $64,747 to $69.691. In families, we see a similar pattern except that, by definition, there are no 1-person families. Median income for a two-person family is $56,646 and rises, peaking at $76,049 for 4-person families. From that point, median income declines to between $64,478 and $70,403 for larger families.
http://economistsoutlook.blogs.realtor.org/2014/04/08/median-income-family-vs-household/
This is BS, Idaho's state tax will get you for 7.8% if you make over 24,000 a year, the only economy they seem to have is the Boise bubble, they also have over the top inheritance taxes and North Idaho's police force along Spokane Washington's (closest city) are famously corrupt and dangerous.
South Dakota is poor and depressing it's just not an inner city type of poor and depressing, it's more of a desolate, freezing and advertising Walldrug for 400 miles depressing. The Black Hills are nice but all of the money there was made somewhere else as there has never been a lot of high level opportunity in SD. South Dakota also hosts the poorest per capita area in the country known the Pine Ridge Indian Rez.
ND may have had some opportunity but they have way more bodies than they need and they also have a very large police force with too few people to pick on now that things have slowed down. Then there is that drone problem and the new military range, not my idea of free. Having winters that can last 5 months a year and enjoying the windy open prarie at -30 may make up for all of the other downfalls though, depends on what your into.
I was thinking about moving to Antartica. You don't pay any taxes down there and they say it's gettin' warmer every year.
I don't contribute one red cent to any of these multinational bankers.
I have to stash my money somewhere, so I choose to put it into my local credit union.
Someone in my local community is borrowing my money to make a go of it... and I'm supporting these struggling American small and mid-sized business people in my own community.
Fuck these Federal Reserve system assholes. They aren't getting any of my money.
Janet Yellen can kiss my ass.
Okay... this is dumb. I live in central MN about 90 minutes from the ND border. When I was working as a guitarist and soundman I was based out of Fargo for about 5 years. And I'm here to tell you: until shale, ND was fucking poor. I know a bunch of people still in the entertainment biz, and this has been an abysmal summer. Wait till shale really goes smash.