Like swallows to Capistrano — they are still showing up aren't they? — people bearing Tax Foundation numbers return to the notion that everything is better in low-tax states because (you guessed it) taxes are low.
Last week, the Wall Street Journal mined this familiar territory with the help of an article about testing the reliability of "happiness" studies. The Journal also tossed in a United Van Lines study of mobility that is a recurring, non-scientific, source of glee. (I wrote about a previous example here.)
Mitch Berg jumped on the Journal's pastiche with this:
We’ve always known that those “Happy To Pay For A Better Minnesota” signs and slogans were buncombe – but it was more of a gut feeling.
But now we have empirical, clinical proof it’s all bull-effluvia. The unhappiest states are the ones with the highest taxes; the happiest ones, pretty much, have the lowest taxes (with occasional emphasis added by me):
Does living in a blue state make people blue? It seems so, according to a new study in Science magazine that ranks states according to their happiness. The study finds that New Yorkers are the unhappiest people in America and their neighbors in Connecticut come in a close second, followed by Michigan, Indiana, New Jersey, California, and Illinois. And the happiest states? Drum roll, please…Louisiana, Hawaii, Florida, Tennessee, and Arizona.
Actually, there's no empirical, clinical proof of a connection, of course, even though Mitch is impressed the name of the magazine is Science.
Here's what the study by two economists tested: whether the subjective (and presumably unreliable) responses of individuals about their happiness correlated with objective estimates of life satisfaction based on economic theory. The study found that subjective responses aligned closely state-by-state with what economists might predict.
Put more plainly, for those who like research to correspond with their gut feelings, the study says: If you live in a place with warm weather, relatively open spaces, few services and no pressure, an economist says you're probably happy. Next time, if you say you're happy, the economists will believe you.
Bingo! Bubba is probably happier than an MIT professor, a Wall Street Banker, a Silicon Valley entrepreneur, the the Connecticut-based CEO of $100-billion company. Fortunately for the happy states, they have the unhappy ones to keep the country from turning into Tobago.
The state rankings, however, attracted most of the attention. And the correlation with tax rankings had nothing to do with the Science article. Cue the Wall Street Journal with opinionators with the Tax Foundation crush.
To its credit, the Tax Foundation cautions in its Tax Policy Blog not to put much store in this sort of speculation and points to a Cato Institute article that questions the entire notion of happiness studies.
So is looking for analysis from people happy to find preconceptions reinforced.
But while unhappiness is correlated with high tax burdens, high income is also kind of correlated with high tax burdens. People in New Jersey, New York, and Connecticut might be taxed a lot, but they earn a lot too. So it is unlikely that disposable income is a major cause of "happiness", or whatever this survey recorded, because people in those states would still have relatively high levels of disposable income.
Also noteworthy is in a world wide happiness survey Denmark, Finland, and the Netherlands (not thought of as low tax countries) came out on top. Although citizens in those countries receive a lot of quality public services—a point the editorial makes. That is something one cannot say about living in New Jersey.
Focusing on one policy area, like tax policy, and happiness is a mistake.