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_________________________________________________________________________________

____

Top 10

Top 10

Tax-

Tax-

Hiking

Cutting

States

States

U.S.

FY90-96

FY90-96

Average

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___

FY1990-96 Revenue Increases

(as % of 1990 Personal Income)

1.7%

-0.3%

0.6%

Population, 1990-95

4.2%

7.4%

5.4%

Employment, 1990-95

0.0%

10.8%

5.9%

Unemployment Rate (% pts.), 1990-95

-0.2

-0.5

0.1

Unemployment Rate, 1995

6.0%

4.7%

5.6%

Personal Income, 1990-95

27.0%

32.6%

28.6%

Per Capita Personal Income, 1990-95

21.8%

23.4%

22.1%

Budget Reserves, FY1996 (% of spending)

1.7%

7.1%

5.1%

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the period 1990-96.  The results are at least suggestive

that when states reduce their aggregate and marginal tax

burden4s, they improve their comparative economic perform-

1

ance.

Major findings, as summarized in Table 2, include the

following:

Population Growth

Americans voted with their feet in favor of tax-cutting

states.  Population gains were 4.2 percent in the tax-

raising states but 7.4 percent in the tax-cutting states.

The tax-cutting states gained 500,000 more people than did

the tax increasers.

Employment Growth

Businesses and jobs migrated to low-tax states in the

1990s.  From 1990 to 1995 the United States gained 7 million

net new jobs.  But in the 10 states that raised taxes, total

employment did not rise at all--in fact, it fell slightly.

The biggest job losses were in the tax-raising states of