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April 21, 2005

She blinded me with reality

Following up on a short string of posts we've done on taxation and it's impact on the economy, The Seattle Times brings us Providence Journal columnist Froma Harrop's $.02 on the subject: A healthy business climate takes more than tax breaks

Echoing the trend that I noticed when comparing the Organisation for Economic Co-operation and Development's annual data on tax revenues as a percentage of GDP and The World Economic Forum's annual report ranking nations in their Global Competetiveness Report, Harrop notes that when comparing individual states with each other there seems to be something of a disconnect between low corporate taxation and the apparent attractiveness of a given state to corporations looking to invest in a state.

Every year, the free-market Pacific Research Institute ranks states on its U.S. Economic Freedom Index. It gives good grades for low wages, liberty to pollute and tax policies that let the rich off the hook. Last year, Kansas was number one.

If Kansas is such a great place for businesses to roam free, why aren't businesses charging in? The institute asserts that gains in a state's economic-freedom score are tied to a rise in per-capita income. That's interesting, but the fact remains that Kansas' average per-capita income, $30,811, is lower than that in all 10 of the bottom-ranking states. Third-from-last Connecticut has the nation's highest, $45,398.

Perhaps companies are looking for something other than servile state governments. Perhaps they want educated workers. And perhaps educated workers want to live in communities where schools don't worry about teaching evolution science. Freedom comes in many forms.

Hands down the best zinger in Harrop's column is this paragraph:

The Pacific Research Institute itself chooses to live in regulation-happy San Francisco. And its "economic freedom" index pans California as the second most "tyrannical" state in America. (New York is apparently worse.) Why would a think tank dedicated to limited government stay in such a sinkhole? Guess life is kind of good in Frisco.

Heh... indeed! That little nugget pretty much destroys The Pacific Research Institute's credibility with me. Nothing turns me off quicker than a flaming hypocrite preaching the same old tired "do as I say, not as I do" line of BS.

Posted by Kevin at April 21, 2005 12:03 PM