Want to go on a shopping spree without breaking the bank? Then pack up the car and head to Mississippi.
This week, the Tax Foundation released a map showing the relative value of $100 for each state compared to the national average:
As the map suggests, cost of living varies greatly by region. As the Tax Foundation notes:
Regional price differences are strikingly large; real purchasing power is 36 percent greater in Mississippi than it is in the District of Columbia. 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.
In an attempt to offset this disparity, more expensive states generally offer higher salaries to their residents. But in practice, that hardly does the trick. Check out the difference in the bottom line between residents of California and Nebraska:
Californians and Nebraskans earn roughly the same average salaries, but Nebraskans’ “real” incomes come out to nearly $10,000 more.
Of course, states’ policies can and do affect these outcomes. Californians pay much more in taxes, energy, food, and housing than their Nebraskan counterparts. But it is important to reiterate that federal policies apply to all states in equal measure, paying little mind to the regional variables and circumstances that lead to the differing values of a dollar from state to state. “Fairness,” an idea that countless politicians use as cannon fodder, seems to be little more than a myth.
How do regulations and the cost of living affect your quality of life? Give it some more thought on our Regulations page.