Taxation, Unemployment and Crime – The Reality
By Ben Loyola
March 10, 2010
I firmly believe that Reagan’s philosophy of economic expansion through lower taxes holds true, and that higher taxes hurt everyone, especially those of limited means through lower employment opportunities and higher crime rates. To prove this belief, I researched the impact of high taxation on real citizens and found the data shows that this is not simply a philosophical argument. Its basis is in fact.
The era of big government continues to be fueled by this remarkable fallacy: That increased taxation and bigger government contributes to rising job prospects, strong employment and services that provide a safer quality of life.
The data shows the opposite is true. States with the lowest taxation have the lowest unemployment and the lowest crime rates. Conversely, states that enact the highest taxation have higher unemployment and higher rates of crime.
The following table lists the states in order of unemployment, with additional columns showing the state sales tax and personal income tax. The combination of state sales tax and personal income tax represents a major redistribution of individuals’ wealth through both taxation on income and expenditures.
The combination of these taxes represents a hindrance to capitalism and free market enterprise. The highest rates are highlighted in red shade and the lowest rates are highlighted in a green shade. The cluster of red bands at the top indicates a correlation of states that have higher taxes, higher unemployment and higher crime rates.
As taxes rise there is a direct correlation to rising unemployment and crime rates.
A political body which turns to raising taxes to meet the demands of out of control government spending versus lowering taxes and cutting costs sends a clear message that they don’t understand basic and proven supply and demand economic principles. Their unfounded policy of raising taxes to pay for unsupportable expenditures is detrimental to their citizens.
Unemployment 1 |
Sales Tax 2 |
Income Tax 2 |
Total Taxes |
Crime Rate 3 |
|
14.6 |
6.00 |
4.35 |
10.35 |
41 |
|
13 |
6.50 |
0.00 |
6.50 |
50 |
|
12.9 |
7.00 |
9.90 |
16.90 |
9 |
|
12.6 |
6.00 |
7.00 |
13.00 |
48 |
|
12.4 |
7.25 |
9.30 |
16.55 |
37 |
|
Washington D.C. |
12.1 |
5.75 |
8.50 |
14.25 |
51 |
11.8 |
7.00 |
0.00 |
7.00 |
46 |
|
11.2 |
4.25 |
7.75 |
12.00 |
33 |
|
11.2 |
6.00 |
6.00 |
12.00 |
22 |
|
11.1 |
6.25 |
3.00 |
9.25 |
31 |
|
11 |
0.00 |
9.00 |
9.00 |
20 |
|
10.9 |
5.50 |
6.24 |
11.74 |
28 |
|
10.9 |
4.00 |
5.00 |
9.00 |
38 |
|
10.5 |
7.00 |
0.00 |
7.00 |
45 |
|
10.2 |
4.00 |
6.00 |
10.00 |
39 |
|
9.8 |
7.00 |
5.00 |
12.00 |
27 |
|
9.8 |
6.00 |
3.40 |
9.40 |
26 |
|
9.7 |
7.00 |
8.97 |
15.97 |
16 |
|
9.3 |
4.23 |
6.00 |
10.23 |
32 |
|
9.3 |
5.60 |
4.54 |
10.14 |
43 |
|
9.3 |
6.50 |
0.00 |
6.50 |
30 |
|
9 |
6.00 |
7.80 |
13.80 |
11 |
|
9 |
4.00 |
6.85 |
10.85 |
15 |
|
9 |
0.00 |
6.95 |
6.95 |
34 |
|
8.9 |
6.00 |
5.00 |
11.00 |
10 |
|
8.9 |
5.00 |
5.30 |
10.30 |
21 |
|
8.9 |
6.00 |
3.07 |
9.07 |
25 |
|
8.8 |
0.00 |
0.00 |
0.00 |
44 |
|
8.7 |
5.00 |
6.75 |
11.75 |
13 |
|
8.5 |
6.00 |
6.50 |
12.50 |
12 |
|
8.3 |
5.00 |
8.50 |
13.50 |
3 |
|
8.3 |
5.00 |
5.30 |
10.30 |
47 |
|
8.3 |
6.25 |
0.00 |
6.25 |
36 |
|
7.7 |
6.00 |
7.00 |
13.00 |
40 |
|
7.5 |
6.00 |
6.25 |
12.25 |
42 |
|
7.5 |
4.00 |
6.00 |
10.00 |
49 |
|
7.5 |
2.90 |
4.63 |
7.53 |
24 |
|
7.5 |
4.00 |
0.00 |
4.00 |
7 |
|
7.4 |
6.50 |
7.85 |
14.35 |
18 |
|
7 |
0.00 |
0.00 |
0.00 |
1 |
|
6.9 |
6.00 |
9.50 |
15.50 |
2 |
|
6.9 |
4.00 |
8.25 |
12.25 |
23 |
|
6.9 |
5.00 |
5.75 |
10.75 |
14 |
|
6.7 |
4.65 |
5.00 |
9.65 |
17 |
|
6.7 |
0.00 |
6.90 |
6.90 |
6 |
|
6.6 |
5.00 |
8.98 |
13.98 |
8 |
|
6.6 |
5.30 |
6.45 |
11.75 |
29 |
|
6.6 |
4.50 |
5.50 |
10.00 |
35 |
|
4.7 |
5.50 |
6.84 |
12.34 |
19 |
|
4.7 |
4.00 |
0.00 |
4.00 |
5 |
|
4.4 |
5.00 |
5.54 |
10.54 |
4 |
|
1 |
US Bureau of Labor Statistics Jan 2010 |
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2 |
Federation of Tax Administrators |
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3 |
CQPress 2009 State Crime Rate Ranking |
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The following graphs depict a linear regression fit to the tabular data.
The rising slopes on each graph show the correlation of taxes, unemployment and crime.
Ben Loyola is a candidate for the Republican nomination in Virginia’s 2nd Congressional District. He’s a 25-year resident of Virginia Beach, US Naval Academy graduate, 30-year Navy veteran with combat experience, successful award winning businessman, and a true Conservative Reagan Republican.
