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The Real Problem with the Blue-State Model

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IStock_000006407863MediumThe taxes are high and the services are low! Steven Malanga debunks the idea that high-tax states provide better services:

[T]axes aren’t the only reason people give for leaving or hoping to leave. When Monmouth University’s polling institute asked Jersey residents, 30 percent listed taxes as a reason, the largest group. But 24 percent said that the overall high cost of living soured them on the state, and 28 percent listed reasons relating to quality of life, from government corruption and traffic congestion to lack of opportunity. A similar poll taken of the state’s businesses in January of last year found that twice as many planned to expand elsewhere rather than keep growing in-state. While taxes were their biggest gripe, business executives rated quality-of-life problems close behind, with only 24 percent deeming New Jersey a better place to live than other states.

What do residents generally want from local government, and how do the states with heavy out-migration perform in those areas? In most polls, infrastructure—especially roads, bridges, and airports—ranks high among the basic things that citizens and businesses expect government to provide. Given how much revenue high-tax blue states rake in, this should be an area where they vastly outperform their peers—but the opposite is true. In its annual rankings of the best and worst places to do business in America, CNBC collects data on everything from roads and airports to water systems and ports, and then grades states on their performance. Among the bottom ten—that is, the places with the worst-rated infrastructure—are six Democratic states, which also rank among the highest in taxes collected per resident: Connecticut, Hawaii, Maryland, Massachusetts, New Jersey, and New York. No Democratic state makes the best-infrastructure list.

Even more startling, several top-rated states for infrastructure are among the lowest taxed. Governor Abbott’s Jersey-poaching Texas boasts the top overall ranking. “No state ships more goods to more places than Texas,” observes the study, and Texas, on average, does it better than other locales. Also scoring within the top ten: Tennessee, which collects the second-lowest state and local taxes per capita; Florida, ranked fourth lowest in taxes; and Utah, with the eighth-lowest burden. Judging by the list, an almost inverse relationship exists between the resources that state governments take in and how effectively they build and maintain infrastructure.

[Steven Malanga, “The Real Problem with the Blue-State Model,” City Journal, Winter 2019]

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