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What Determines Economic Success: Education, or Taxes?

There are studies that show the benefits of tax cuts on economic performance, and there are also studies that show the effect that education has on state economies.  But considering both education and taxes, which has the biggest effect on the economy?  If we look at rankings of state economic success data from a Wallethub analysis, U.S. News & World Report data on education, and a study by Moneygeek  on state taxes (the lower the taxes, the higher the rank), we can then calculate the differences of states’ education and economic ranks as well as the differences of states’ tax burden and economic ranks, yields this chart.  If the difference is between the education and economic success ranks is smaller than the difference between a states’ tax burden and economic success ranks, then education has more of a relationship than tax burden for that state.  If the tax burden-economic success difference was less than education-economic success, than tax burden has the stronger relationship for that state.

The results are summarized in the table here:



From this table you can see that there is a closer relationship between education rankings and economic success rankings than between tax rankings and economic success rankings in 31 states, while we see the reverse within the 19 other states.  From this analysis, we can conclude a that education is connected more frequently with economic success than taxes.

 

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