Which state leads the nation in economic freedom, and which comes in last?
The Live Free or Die state is living up to its motto.
New Hampshire leads the United States in economic freedom for the second consecutive year, according to a report from Fraser Institute, a free-market oriented think tank in Canada.
The economic freedom index uses data from 2014 — the most recent available — to measure government spending, taxation and restrictions in the labor market in each state. New Hampshire got an 8.3 out of 10 this year. It was followed on the list by Florida, Texas, South Dakota, and Tennessee.
The five least-free states were New York, California, Alaska, New Mexico, and Hawaii.
Dean Stansel, an economics professor at Southern Methodist University and co-author of the report, noted that states that rank higher on the study have generally seen an influx of new residents in recent years, especially compared to those that rank at the bottom of the list:
Americans have been voting with their feet against the ‘big government’ approach of New York and California. Florida and Texas have experienced more than two-and-a-half times faster population growth in recent years, and they’re among the freest states in the country.
North Carolina made the biggest upward rise in the 2016 report, moving from 25th to 13th following a big state income tax cut.
Fraser Institute also includes the 10 Canadian provinces and 32 Mexican states in the study in an overall look at North America. Alberta topped the overall list, with British Columbia tied with New Hampshire for second.
The United States has been falling steadily in the rankings since 2004, having dropped from an average of 8.26 to an average of 7.7 in the past decade. Fraser said this is primarily due to federal level changes.
The average per-capita income in the most-free states was 4.7% above the national average; in the least-free states earnings were 3.3% below the national average.
“The link between economic freedom and prosperity is clear — people who live in states that support low taxation, limited government and flexible labor markets have higher living standards and greater economic opportunity,” said report co-author Fred McMahon, the Dr. Michael A. Walker Research Chair in Economic Freedom at the Fraser Institute.
Cross-posted from Watchdog.org/Johnny Kampis
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