Best and Worst States for Freedom


I saw the new study of the freedom index from George Mason Unversity’s Mercatus Center. The study ranks freedom based on three factors

  1. Fiscal Policy (35.3%)
  2. Regulatory Policy (32%)
  3. Personal Freedom (32.7%)

Based on this study, top 10 states in terms of personal freedom are:

  1. North Dakota
  2. South Dakota
  3. Tennessee
  4. Pennsylvania (tied for 3)
  5. New Hampshire
  6. Oklahoma
  7. Idaho
  8. Missouri
  9. Virginia
  10. Georgia
  11. Utah

The bottom 10 states are

  1. New York
  2. California
  3. New Jersey
  4. Hawaii
  5. Rhode Island
  6. Illinois
  7. Maryland
  8. Vermont
  9. West Virginia
  10. Mississippi

I took the numbers and looked at the list from other view points. The states with the least individual state and local tax burden. Freedom rank in parenthesis:

  1. South Dakota (2)
  2. Oklahoma (5)
  3. North Dakota (1)
  4. Tennessee (3 – tied)
  5. Alabama (18)
  6. Montana (12)
  7. New Hampshire (4)
  8. Idaho (6)
  9. Texas (14)
  10. New Mexico (21)

And the highest state/local tax burden

  1. New York (50)
  2. Hawaii (47)
  3. New Jersey (48)
  4. Maine (39)
  5. Vermont (43)
  6. California (49)
  7. Wyoming (36)
  8. Wisconsin (38)
  9. Rhode Island (46)
  10. Connecticut (40)

I started looking at the numbers and saw the figures for income. While that might be an interesting number to post, it does not tell who is best off financially, as many high income states are also high taxation and/or high cost of living states. To determine the best state to live in financially, I took total income minus tax burden and compare to the cost of living. Doing a simple calculation, I find these states to be the best, financially, to live in.

  1. Virginia (8)
  2. North Dakota (1)
  3. Wyoming (36)
  4. Illinois (45)
  5. Nebraska (22)
  6. South Dakota (2)
  7. Massachusetts (30)
  8. Colorado (19)
  9. Kansas (26)
  10. Washington (29)

And these are the 10 Worst states to live in financially

  1. Hawaii (47)
  2. Alaska (13)
  3. Maine (39)
  4. Vermont (43)
  5. California (49)
  6. Rhode Island (46)
  7. Mississippi (41)
  8. Arizona (11)
  9. Oregon (28)

I did this again by taking the cost of living and figuring out the income necessary to live in the state and ended up with a nearly identical list. On the top list, North Dakota and Wyoming changed places, South Dakota dropped to 12th place and Washington to 11th and Minnesota and Connecticut made the list. On the bottom Mississippi and Arizona changed places.

From the figures, the states with the lowest tax burdens are generally the states with the most freedoms. I don’t know whether a case could be made that more taxation brings on more legislation to reduce freedom or not (the data is inconclusive), but it makes sense: when government taxes more, it has to find ways to spend the money, and at least some of that will be in the form of regulation (which also brings in more money to the state).

But this does not mean you are always the best off financially in the states with the most freedom, although the states with the worst freedom ranking are represented fairly heavily in the 10 worst states to live in financially, so there appears to be more of a correlation to a lack of freedom and financial woes.

Peace and Grace,
Greg

Twitter: @gbworld

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