Report Shows Link Between Taxes & Children’s Well-Being

STATE – A report released earlier this month by the Foundation for Child Development determined that states with higher tax rates produced a better quality of life for their children.

“Because less than 10 percent of the federal budget is invested in children’s programs, state spending has a large impact on children’s well-being,” says Ruby Takanishi, President of FCD. “With this new measure, we can see proof of the direct impact of state policies: when states invest in children, children do better.”

The FCD Child Well-Being Index (CWI) is a national, research-based composite measure, updated annually, that describes how young people in the United States have fared since 1975. It combines national data from 28 indicators into a single number that reflects overall child well-being.

New Jersey had the highest CWI value, 0.85. Other high-ranking states include Massachusetts, New Hampshire and Connecticut. The lowest ranking states were Arizona, Nevada, Arkansas, Louisiana, Mississippi and New Mexico.

According to the report, states that have higher tax rates generate higher revenues and have higher CWI values than states with lower tax rates. The amount of public investments in programs is strongly related to CWI values among states. Specifically, higher per-pupil spending on education, higher Medicaid child-eligibility thresholds, and higher levels of Temporary Assistance for Needy Families (TANF) benefits show a substantial correlation with child well-being across states.

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