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Virginia 2, Maryland 0

In two separate analyses, Virginia has come out ahead against its Maryland neighbor.

In the first, CNBC’s fifth annual study of America’s top states for business, Virginia garnered the #1 spot. According to CNBC, the study ranks all 50 states, using more than 40 metrics in ten broad categories of competitiveness, categories such as cost of business, workforce, and business friendliness. Maryland, on the other hand, had an overall ranking of #29, and outperformed Virginia in only one of the 10 categories.

In the second study, entitled “Rich States, Poor States," prepared for the American Legislative Exchange Council by Arthur Laffer, Stephen Moore and Jonathan Williams, Virginia ranked #3 while Maryland ranked #21. The rankings included such measures as gross state product growth, personal income growth per capita, and non-farm payroll employment growth.The study for ALEC was introduced by a message from Gov. Sam Brownback of Kansas that included the following comments:

"Rich States, Poor States should be required reading for governors, legislators, and those who serve them. Money is spent more efficiently by the private sector than by governments, so it is reasonable to expect that states with lower overall taxes have better economic environments than states with high taxes and more government spending. It is true that lowering taxes can be politically difficult: even fiscal conservatives start losing their enthusiasm for cutting taxes when special interest groups that consume a state’s tax dollars warn them that tax cuts will have dire consequences. But the consequences of being caught in a spiral of increased taxes and a decreasing rate of return on the tax base are much more dangerous. Arthur Laffer, Stephen Moore, and Jonathan Williams use a clear, concise format to expose the scare tactics of the tax-and-spend crowd and show how economic vitality follows lower taxes.

“It is true that the policies of the federal government have a direct effect on the economic environment of the entire country, but governors and legislatures are not rudderless. We can and must start to change our country’s economic course by providing an environment that rewards our citizens for their efforts and their risks. The founders of our country understood that a republic with its multiple states was the perfect incubator for vetting competing approaches to public policies.

"Rich States, Poor States illustrates the outcomes of various tax policies at the state level throughout the country. The evidence is overwhelming and the proper course is clear: States should pursue policies that leave more money in our citizens’ pockets to help fuel and drive our economy.”

One especially interesting section of the ALEC report provides “10 Golden Rules of Effective Taxation.” Just two of them are:

  • “When you tax something more you get less of it, and when you tax something less you get more of it.”
  • “An economically efficient tax system has a sensible, broad tax base and a low tax rate.”

Some very useful information to remember come election time in November, especially when liberal/progressive politicians talk about “unmet needs” and raising taxes.

The reaction of Virginia Governor Bob McDonnell to the CNBC news can be found at the governor's blog.

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