NY and CA spend billions more in taxes than TX and FL — and get worse results

America’s four largest states — California, Texas, Florida and New York — have a lot in common. They are iconic, dynamic and diverse. Each could be formidable countries themselves.

And, yet, they are also very different in their politics and governance. California and New York are dominated by Democrats who have implemented the nation’s highest and sixth-highest marginal income tax rates, respectively, to help finance large social programs and bureaucracies. (New York’s rate rises to second-highest if New York City income tax is included.)

 

The official poverty rate, which measures only market income, remains slightly higher in absolute terms in Texas and Florida than New York and California. However, according to the supplemental poverty rate, which many social scientists prefer because it includes taxes and transfers and better reflects living standards, California is the poorest state in the nation with 18 percent of its population under the poverty line, followed by 16 percent in Florida, and 14 percent in Texas and New York.