Tennessee ranks among best states for economic competitiveness
Tennessee's low tax rate and right-to-work labor policy helped the state outperform the country in its economic growth over the past decade, according to a new conservative study that ranks Tennessee as one of the top states for its economic outlook.
Tennessee is one of nine states that don't have a personal income tax and Tennessee is phasing out its tax on inherited income and other unearned income at the end of this year.
"In a state like Tennessee where we have probably the lowest tax burden of any state in the nation, this is a state that people move to from other higher-tax states," said Arthur Laffer, the leading "supply-side" economist who backed President Ronald Reagan's tax cuts in the 1980s and helped co-author the new report on "Rich States, Poor States." "Economic growth is the answer to lots and lots of our problems and when you look at tax structures don't look at static burdens, look at dynamic burdens."
From 2008 to 2018, Tennessee's overall economy as measured by its gross domestic product grew by 44.7% — the 11th fastest of any U.S. state and above the national average in all but three of the 10 years. The Volunteer State also added a net 251,287 persons from domestic migration — the 8th highest of any state — and grew payroll employment by 13% to rank No. 12 for job growth among the states.
Tennessee still boasts the fifth-lowest average property tax rate of any state and overall one of the lowest tax burdens among the 50 states.
American Legislative Exchange Council State Economic Competitiveness Index for 2020: