CATO: South Dakota 5th freest state in U.S.
(The Center Square) – Thanks to its low taxes and public debt, right-to-work status and above-average regulatory policies, South Dakota was ranked by CATO Institute as the fifth-freest state in the U.S.
In the sixth edition of its “Freedom in the 50 States” report, CATO, a Washington D.C.-based libertarian think tank, ranks states based on its fiscal and regulatory policies as well as its policies on personal freedom.
“South Dakota’s fiscal policy is excellent,” CATO said in its report. “The state has one of the lowest tax burdens in the country, although it has risen slightly at both state and local levels since a decade ago. State taxation is extremely low at 3.6 percent, with local taxation at 4.2 percent.”
State and local debt also is well below the national average, the institute notes.
For regulatory policies, South Dakota ranks high for its labor laws, land use and health insurance freedoms, according to CATO, but the state’s occupational licensing regulations have grown over the years.
South Dakota also has some work to do on criminal justice reform.
“South Dakota’s criminal justice policies are excessively strict from our point of view,” the report said. “For its crime rate, it imprisons more than it should. Drug arrests are well above national norms. However, the victimless crime arrest rate dipped significantly from 2018 to 2019, no matter how it is measured, and is part of a longer trend in the right direction.”
To improve the state’s ranking, CATO recommends trimming “spending on employment security administration, natural resources, and parks and recreation, areas far above national averages.” Also, it suggests eliminating the bank franchise tax,” among other measures.
The full South Dakota analysis can be found here.
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