In an editorial a few weeks ago, the Wall Street Journal gleefully reported that people continue to move away from “Blue” states to “Red” ones. I am a proud resident of Boston, Massachusetts. So, my initial reaction was a four letter word starting with “F.” That word was followed by a three letter word starting with “Y”. You will have to guess them: it’s a family blog.
But, I had to admit: they aren’t wrong. If you look at the raw data, a 1-percentage point increase in a state’s average tax burden in 2022 was associated with a 0.08 percentage point reduction in the state’s 2022-2023 population growth. You know what though? Those higher taxes might buy something. It all comes back to an old saying: death and taxes.
Death and Taxes: Life Expectancy and State Taxes
I like maps. More specifically, I like maps that combine geography and data. I spend a lot of time here. As I read that Wall Street Journal piece, a map popped into my head. It was the Centers for Disease Control and Prevention’s Life Expectancy by state. And, I seemed to remember that a lot of the states that the Wall Street Journal was poking fun at for losing residents also had high life expectancy.
Not one to trust my memory, I went and downloaded the CDC data. Then, I went to the Tax Foundation’s website and downloaded state and local tax burdens. And, because the only thing that I like more than maps are charts, I made this one. The figure pretty clearly shows that states with higher taxes also have longer life expectancies.
Figure. Relationship between Life Expectancy at Birth and State and Local Average Tax Burdens
The relationship above suggests that a 1-percentage point increase in a state’s average tax burden is associated with a 0.5 year increase in Life Expectancy at birth. Maybe we should change the saying from “death and taxes” to “death and low taxes”.
Why the Correlation?
Now, unlike the Wall Street Journal editorial page, I’m not prone to take a simple correlation and make a causal argument without some caveats. What can I say, I’m honest. Lots and lots of things are likely going along with those high taxes that might cause people to live longer aside from the taxes themselves. On average, people in higher tax states often have higher incomes, more education, and exercise more. Those things may have something or nothing to do with the higher taxes in those places.
But, some evidence exists from a good source that at least some of this correlation is in fact due to policies enabled by those higher taxes. An article in the Milbank Quarterly — a leading journal on population and health — sheds some light on the topic. In it, a group of authors led by Jennifer Montez note that U.S. life expectancy has grown incredibly slowly over the last several decades. A lot of that slow down has been driven by conservative U.S. states specifically. Why?
The authors find that states with high taxes have a number of liberal policies that are associated with significantly longer lives. For example, those “blue” states have higher tobacco taxes. They have more strict gun control. They have more regulation in private labor markets, like paid leave or higher minimum wages. And, they are kinder to immigrants. Indeed, the authors find that it isn’t so much higher taxes that seem to cause higher life expectancy directly, but the confluence of policies that are either enabled by or that go along with those taxes.
Does this matter? Yes. The authors report that adopting more liberal policies could increase U.S. Life Expectancy by up to two years. I say “could” because (unlike editorial pages) the authors admit that their evidence alone does not prove causation. But, it does offer a powerful rejoinder. Maybe before writing pieces making fun of liberal states for losing residents because of high taxes, it’s worth looking at whether low-tax states are losing residents to something worse.