Here in Louisiana, a dollar goes quite a bit further than it does in most other states and its relative value is rising, according to a new report from The Tax Foundation that’s based on recently-released data from the Bureau of Economic Analysis on personal income for 2013.
The data shows $100 in Louisiana will buy you items that would cost $109.65 in a state closer to the national average. The Tax Foundation has in recent years compiled a map of all states showing what the relative value of $100 is in each. Compared to the data released last year, the relative value of $100 has risen by 24 cents in Louisiana, up from $109.41 last year.
The data shows $100 goes the furthest in Mississippi ($115.21), Arkansas ($114.29), South Dakota ($114.16), Alabama ($114.03) and West Virginia ($113.12). In contrast, $100 is effectively worth the least in the District of Columbia ($84.96) Hawaii ($86.06) New York ($86.73) New Jersey ($87.34) and California ($89.05.)
“Regional price differences are strikingly large; real purchasing power is 36% greater in Mississippi than it is in the District of Columbia,” The Tax Foundation reports. “In other words: by this measure, if you have $50,000 in after tax income in Mississippi, you would have to have after-tax earnings of $68,000 in the District of Columbia just to afford the same overall standard of living.”
The relative price differences in each state has substantial implications for public policy, which is often progressive with respect to income, the foundation says.
“Many policies—like minimum wage, public benefits, and tax brackets—are denominated in dollars. But with different price levels in each state, the amounts aren’t equivalent in purchasing power,” the report says. “This has some unexpected consequences; people in high-price-level states like New Jersey will often pay more in federal taxes without feeling particularly rich.”
