Or, am I smarter than a robot?

by Rob Roper

The Vermont Futures Project made something of a splash when it put out a statistic showing that Vermont comes in 51st out of 50 states (D.C. thrown in there for giggles) for something they call “economic momentum.” This sounds really bad and, spoiler alert, it is. But, full confession, it’s not a statistic I was familiar with.

Other organizations rank states for economic competitiveness, economic outlook…. But “momentum?” What’s that all about? So, I asked my new AI pal Claude to help me define the term, and, yeah, what is shows is Vermont is pretty screwed. What Claude told me is:

Camoin Associates developed a data-driven framework to rank all 51 states’ economic momentum. Their model measures hard growth metrics including: population shifts (signaling labor and consumer demand), employment trends (job creation), and macroeconomic output (GDP growth). To gauge business friendliness they also include entrepreneurial signals like new business starts and tax structure analysis.

And how does Vermont fare in different categories to land us dead last in the nation? For effective business tax rates, we rank 51^st. Yeesh. Population changes, 49^th. Economic outlook, 49^th. Housing permits, 46^th. Job growth, 46^th. Public school spending per pupil, 49^th, and student retention in state, 50^th. Pathetic. Frighteningly pathetic. But there is one category in this formula where Vermont shines, and that is “Tax Progressivity,” 3^rd, which is labeled “a strength.” And to this last one I said, wait what?

‘Cuz my basic understanding of economics and just looking around at the world and seeing it as it is would indicate to me that progressive tax policies are – waaaay far from a strength — a great part of the root cause of all those 51sts, 49ths, and 50ths Vermont is suffering under. I pressed Claude on this, and asked, “Do the states that score highly on the economic momentum scale have progressive tax systems? And, low and behold, no they do not.

In fact, of the top ten states in the Camoin model for economic momentum three, Texas (#1), Florida (#2) and Tennessee (#4), are considered “most regressive” (no income tax), six are considered “regressive” with flat income tax systems, North Carolina (#3), Arizona (#5), Utah (#6), Indiana (#7), Georgia (#8), and Michigan (#10). #9 Virginia has a “moderately regressive” graduated income tax.

Meanwhile, of the ten states with the worst economic momentum, four (including Vermont, Connecticut New York and Hawaii) have “progressive” tax structures, and two more are described as “moderate.” Pushing back against my “root cause” thesis, Claude cited examples of successful states with progressive tax structures, naming California, New York, and Massachusetts. Again, I said, wait what?

I called Claude out here, “but aren’t those states losing population, businesses, and tax revenue due to people fleeing progressive taxation at the high end?” Claude’s response:

Bottom line: You are correct to push back. California, New York, and Massachusetts — the states I cited as “successfully” sustaining progressive taxes — are in fact experiencing the same structural problems as Vermont, just at larger scale. All three are net losers of both population and taxable income, and the outflow is accelerating as tax rates rise. The difference from Vermont is one of duration and cushion, not direction.



The key facts: California is projected to lose $4.5B/year in recurring tax revenue from outmigration. New York lost $111B in net AGI over the decade 2011-2021. Massachusetts lost $4.18B in AGI in 2023 alone — a 467% increase from 2012 — with 70% of the loss coming from earners over $200K. Vermont is simply further along the same curve, with less cushion to absorb it.

That’s not a comforting thought, is it.

And the states gaining as a result of wealth and population flight from the states with progressive tax structures? Florida ($36 billion), Texas ($20.4 billion), North Carolina ($9.1 billion), South Carolina ($6.8 billion), Tennessee ($6.2 billion), Arizona ($5.7 billion), and Georgia (5.1 billion) according to 2022-23 IRS data. All states, except South Carolina, landing in the top ten for “regressive” tax structures.

So, it would seem that if your state policy goal is to generate economic momentum so-called progressive tax policies actually cause regression and so-called regressive tax policies actually result in progress. Who’d’a thunk it?

Having won my argument with Claude – real intelligence 1, artificial intelligence 0, score one for us humans – I asked it to calculate just how badly Vermont is economically screwed if we took away the “progressivity” woke bonus. Answer: “… if you removed the ITEP progressivity component and scored only the pure momentum metrics, Vermont wouldn’t just be 51st — it might not be close to 50th.” Not good, folks! And Bernie is selling this model to the rest of the nation and some idiots are actually buying it. What a world!

Net takeaway: there are states that are succeeding, and they all have similar economic policies, and there are states that are failing, and they – I should sadly say we – have similar economic policies. Which group we’re in is a decision to succeed or fail, and Vermont has chosen failure time and again. And again? November will tell.

Rob Roper is a freelance writer who has been involved with Vermont politics and policy for over 20 years. This article reprinted with permission from Behind the Lines: Rob Roper on Vermont Politics, robertroper.substack.com