Sen. Elizabeth Warren, D-Mass, left, speaks at a news conference on Capitol Hill in March. Sen. Al Franken, D-Minn., is at right.

Massachusetts Sen. Elizabeth Warren was on one of the late-night talk shows last week, beating the class-warfare drum and arguing for billions of dollars of new social programs paid for with higher taxes on millionaires and billionaires.

In recent years, blue states like California, Illinois, Delaware, Connecticut, Hawaii, Maryland and Minnesota adopted this strategy and raised taxes on their wealthier residents. How did it work out? Almost all of these states lagged behind the national average in growth of jobs and incomes.

So if income-redistribution policies are the solution to shrinking the gap between rich and poor, why do they fail so miserably in the states?


California is the prototypical example. It has the highest tax rates of any state. It has very generous welfare benefits. Many of its cities have a high minimum wage. But day after day, the middle class keeps leaving. The wealthy areas like San Francisco and Silicon Valley boom. Yet the state has nearly the highest poverty rate in the nation. The Golden State, alas, has become the inequality state.

In the new report, “Rich States, Poor States,” that I write each year for ALEC with Arthur Laffer and Jonathan Williams, we find that five of the highest-tax blue states in the nation: California, New York, New Jersey, Connecticut and Illinois lost some 4 million more U.S. residents than entered these states over the past decade. Meanwhile, the big low-tax red states – Texas, Florida, North Carolina, Arizona and Georgia – gained about this many new residents.

So much for liberal policies creating a workers’ paradise.


The least-regressive-tax states had average population growth from 2003-13 that lagged below the national trend. The 10 most highly “regressive” tax states, including nine with no state income tax, had population growth on average 4 percent above the U.S. average. Why was that? Because states without income taxes have twice the job growth than states with high tax rates. Unlike the experts at the ITEP, most Americans think that fairness means having a job.

Ohio University economist Richard Vedder and I compared the income gap in states with higher tax rates, higher minimum wages and more welfare benefits with states on the other side of the policy spectrum. There was no evidence that states with these liberal policies had helped the poor much and in many cases these states recorded more income inequality than other states as measured by the Left’s favorite statistic called the Gini Coefficient.

The 19 states with minimum wages above the $7.25 per hour federal minimum do not have lower income inequality. States with a superminimum wage – such as Connecticut ($9.15), California ($9), New York ($8.75) and Vermont ($9.15) – have significantly wider gaps between rich and poor than states without a superminimum wage.

States are supposed to be laboratories of democracy, right? These laboratories are providing us with concrete evidence that Robin Hood policies don’t help make the poor richer, they make most people poorer. In other words, the blue states have tried the Elizabeth Warren “progressive” agenda, and people are voting with their feet by fleeing in droves. The income redistribution policies that Ms. Warren and others endorse can only work by building a Berlin Wall so no one can leave – though I hope I’m not giving them any ideas.


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