WSJ: Are Taxes the Root of Unhappiness?

Wall Street Journal op-ed, Are Taxes the Root of Unhappiness? States with the Highest Taxes Also Rank as the Unhappiest, by Allysia Finley (Assistant Editor, opinionjournal.com):

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. [Andrew J. Oswald (University of Warwick, Department of Economics) & Stephen Wu (Hamilton College, Department of Economics), Objective Confirmation of Subjective Measures of Human Well-Being: Evidence from the U.S.A., Science, Dec. 18, 2009.]  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.

Eight of the ten happiest states lean right while eight of the ten unhappiest tilt left. While the study by no means proves that being liberal makes people unhappy, it does reflect some of the unfortunate implications of living in a blue state. ...

[H]igh taxes seem to be a big reason---ostensibly an even bigger reason than weather given that California is one of the unhappiest states and inclement Louisiana is the happiest. ...  According to the Tax Foundation 2008 analysis, three of the top five unhappiest states—New York, Connecticut and New Jersey—have the highest state-local tax burdens. On the other hand, four of the top five happiest states—Louisiana, Florida, Tennessee and Arizona—are among the states with the lowest state-local tax burdens. True, correlation doesn't prove causation, and high taxes alone don't always make people miserable, but there's something going on here.

In states with high property, income, and sales taxes like New York, people have less money to spend on other things that make them happy. They have less money to spend on vacations, hobbies, home improvements, eating out and child care. Another problem may be that people receive a low return on their tax dollars. The study's authors note that people are least happy in states that impose high taxes but don't provide matching public benefits (e.g. good highways to relieve congestion and reduce commute times). It's in states where taxes disproportionately subsidize public employee pensions and entitlement programs, but don't much improve the general public's quality of life, that people are most unhappy.

This intuitively makes sense. If you're paying more than a third of your income in taxes, as many New Yorkers do, then you expect to realize the benefits from your hard-earned tax dollars. You expect quality schools, good roads, low crime rates, and quick commutes. You expect your local and state governments to be responsive to your needs, not to the cash flows of entrenched public employee unions and other special interests.

Here is a 50-state ranking (and the District of Columbia) of the happiest and least-taxed states, along with each state's vote in the 2008 presidential election (blue for Obama, red for McCain):

Happiness Rank	State	Tax Rank
1	Louisiana	2
2	Hawaii	37
3	Florida	24
4	Tennessee	15
5	Arizona	28
6	Mississippi	3
7	Montana	9
8	South Carolina	13
9	Alabama	7
10	Maine	18
11	Alaska	1
12	North Carolina	24
13	Wyoming	16
14	Idaho	33
15	South Dakota	4
16	Texas	19
17	Arkansas	14
18	Vermont	32
19	Georgia	34
20	Oklahoma	11
21	Colorado	35
22	Delaware	31
23	Utah	38
24	New Mexico	8
25	North Dakota	5
26	Minnesota	43
27	New Hampshire	29
28	Virginia	46
29	Wisconsin	39
30	Oregon	25
31	Iowa	12
32	Kansas	21
33	Nebraska	20
34	West Virginia	6
35	Kentucky	10
36	Washington	44
37	D.C.	40
38	Missouri	17
39	Nevada	22
40	Maryland	17
41	Pennsylvania	41
42	Rhode Island	42
43	Massachusetts	45
44	Ohio	30
45	Illinois	36
46	California	48
47	Indiana	23
48	Michigan	27
49	New Jersey	50
50	Connecticut	51
51	New York	49