The American Legislative Exchange Council (ALEC) and supply-side economist Art Laffer recently released their third edition of “Rich States, Poor States,” which evaluates states’ economic competiveness.
Considering its economically stifling policies, it’s not surprising that Kentucky ranks No. 40,(“1″=best,”50″=worst). If I can do simple math and there are still only 50 states (in contrast to President Obama’s reference to “57 states”), then No. 40 out of 50 isn’t too swell. To be precise, despite the fact that Kentucky’s ranking is up from No. 44 in 2008, it remains mired in the bottom 20 percent of states.
States that spend — and tax — less experience greater economic growth. Considering Kentucky’s top marginal personal income tax and corporate income tax rates are the ninth- and 18th-highest respectively, its dismal ranking is well deserved.
On top of the high tax rates, state government was forced to rely on $500 million in federal stimulus funding to balance the budget approved during May’s special legislative session. It’s clear: We’re spending beyond our means.
High taxes and overspending are the main ingredients in the recipe of downtrodden economies.