Douwe Osinga's Blog: Taxes and Human Development in US States

Friday, May 24, 2024

As Franklin would have it, nothing in this life is certain but death and taxes. And when it comes to US states it is generally thought there's a trade-off between the two. Live in a high tax, high quality of life state or cut down on your tax bill and your life expectancy. But is it true? I did some data digging to find out. Let's start with the answer because it makes for a pretty graph:

I would say that you have to squint quite a bit to see a correlation. Mixing in politics does make for some interesting observations:

  • It seems to be generally true that blue states have a higher quality of life and higher taxes vs the lower quality of life and lower taxes for red states
  • But the states with the highest taxes, while all being blue, are not the top states when it comes to human development
  • And the states with the lowest human development scores, while all being red, are not the states with the lowest taxes
  • In particular, New Hampshire seems to achieve a human development outcome comparable to Hawaii but with a lot lower tax burden (also worse weather of course)
  • And Iowa has about the same tax burden as Mississippi, but has much better human development outcome (whether the climate is better is a judgement call I guess)

Tools and sources

You can find the combined data and the processing of the data in this google sheet.

If you make a copy and install the Neptyne Python Add-On you can see all the code processing. Data comes from: