The amount that government taxes is determined solely by the amount it chooses to spend to provide services.  Every state provides the same basket of services (education, highways, social services, etc.) but some states do so at much lower costs.  For example, the states that tax income spent 42 percent more per-resident in 2015 than those without an income tax; Kansas spent 27 percent more.  States without an income tax have superior long term growth in jobs, wages & salaries and Gross Domestic Product and given that they also gained population from domestic migration, it appears that citizens find the lower cost services to be a good value proposition.

spend less tax less 2017

The same is true of the ten states with the highest and lowest combined state / local tax burden (as ranked by the Tax Foundation.)  It’s also noteworthy that states without an income tax and those with the lowest combined tax burden also have lower local taxes per resident, refuting the notion that states with low taxes merely shift the burden to local government.  Data for each state can be found here; job growth data in the above table has been revised to reflect new BLS data released since publication of the 2017 Green Book.

Taxes aren’t the only contributing factor to these disparate economic growth patterns but the ability to tax less leaves more money in the hands of taxpayers and enhances economic growth.