In their Issues & Insights op-ed, Rich States, Poor States co-author Jonathan Williams and ALEC Legislative Manager Skip Estes explain that the 13th edition can be a valuable tool as lawmakers navigate COVID-19.
Considering how economically competitive states widely outperformed high-tax states coming out of the Great Recession, state policymakers looking to capitalize on economic reopening should consider ways to make their state more competitive relative to their peers. First, competitive states avoid passing tax increases during temporary budget shortfalls resulting from an economic downturn. While the revenue might help fix a budget gap in the short term, those tax increases often become permanent and dampen economic growth, discourage business in-migration and erode tax bases in the long term. Competitive states also avoid excessive taxes on capital, like personal income taxes and business taxes.