In states with low-income tax often offer and have more competitive business environments . This was noted in a recent report from the ALEC-Laffer state competitive index fun. States such as Utah, Florida, and Oklahoma ranked the highest on the list. All of these states have a philosophy of low taxes and low spending. On the other hand, states such as New York, Vermont and, New Jersey ranked the lowest on the list. This was primarily due to having high taxes and high spending. One factor that the study pointed to the fact that states that spend less and have lower taxes also experience higher growth overall. Texas ranked number one overall in terms of overall economic performance. The results of this are continuing to be shown by large companies such as Tesla, and Oracle moving out of high tax states such as California to a low tax environment.
The effects of this have also played out in the population gains in 2020 to certain states. States such as Texas and Florida saw population gains while states such as New York and California saw population decreases. These increases are largely due to the affordable housing options afforded in both states as well as the low tax environments. With plans to raise income taxes in California and New York to offset losses from Covid 19, we should see continued growth in these states. Low taxes and affordable housing options make states such as Texas and Florida a good place to invest in real estate. If the higher tax and higher spending continues, red states will continue to offer business incentives to leave high tax states and relocate to their states. This will help the job market in the red states and continue to boost their economies.