While America may boast being a “free” nation, a look at the states reveals that it most certainly is not. Freer than others, sure, but a truly free nation wouldn’t confiscate property from people who hadn’t been charged with a crime, ban people from owning firearms, or keep them from being able to order an extra-large soda at McDonald’s.
Luckily, we have multiple states in the US with multiple different laws. If you don’t like living in one state, it’s pretty easy to move to another without going through the process of denouncing your citizenship. If you’ve been living in the US and feel a lack of freedom, maybe you’ve just been living in the wrong state. Below you’ll find the 10 states with the most freedom as ranked by the Cato Institute and information taken from the website Freedom in the 50 States. Enjoy!
The first state to make the list is Arizona. Compared to other states, the Grand Canyon State has generally been above average on economic freedom for years and has managed to improve on personal freedom. Its fiscal policy is arguably its greatest advantage, having relatively low state-level taxes. As for its higher than average sales tax, it allows residents to enjoy generally low individual and business income taxes. Meanwhile, Arizona’s personal freedom improvements are due to growing gun rights, a medical marijuana law, school vouchers, declining victimless crime arrests, the abolition of sodomy laws, and the legalization of same sex marriage.
Regulatory policy brings Arizona down a few notches. The state has done very little to encourage competition in the telecommunications and cable industry, forcing many consumers into legal monopoly situations. The minimum wage is also higher than the federal standard and the state also has an E-Verify mandate. Meanwhile, incarceration rates have continued to climb for the last few years, and smoking bans are prevalent, complex, and unwanted. The state is also worse than average when it comes to gambling freedom.
Iowa has long stood out above other center-left states on economic freedom. The state benefited from this policy regime, federal farm subsidies, and the 2002–8 global commodity boom to post impressive growth in the past decade and a half. The state stands out more on regulatory policy than some of its other measures. Land-use freedom is ample, and Idaho is also a right-to-work state without a minimum wage. Telecommunications and cable have long been partially deregulated. Educational freedom is high, because the state has a long-standing tax credit scholarship program as well as inter-district public school choice and same sex marriage has been legal since 2009.
Despite Iowa’s fiscal policy regime, there is some indication that its competitive policy advantages are starting to fade. The state would do well to trim spending on areas where the state spends more than the national average (such as education, hospitals, highways, and public welfare) and use the savings to trim property, sales, income, and motor vehicle license taxes. When it comes to personal freedom, Iowa does not do very well on gun freedoms, especially for a rural state. Class III weapons are banned, purchasing handguns requires a permit and waiting period, and open carry requires a license. Cannabis freedom is also sharply limited; a single marijuana offense not involving minors can carry up to 50 years of prison time.
Lacking an individual income tax and featuring a hot climate, Florida has long enjoyed substantial migration of well-off retirees. Its personal freedom has lagged well behind, however. Florida’s state-level tax collections are more than a standard deviation below the national average, while its local tax collections are about average. Despite the temptations posed by high housing demand, homeowners have been unable to enact exclusionary zoning on anything like the levels of California or New Hampshire. Florida has gone further than just about any other state to tighten criteria for eminent domain. Labor law is also above average because of a right-to-work law, though the state does have a minimum wage. Florida is also one of the top states for educational freedom, although homeschool regulations remain substantial. Anyone who has ever visited Florida is also aware of how lightly regulated alcohol is, appearing in theme parks, grocery stores, and even small take out places.
On personal freedom, Florida now appears well below average, only boosted by the supreme court’s decision to legalize gay marriage nation-wide. Before that decision, Florida did not recognize any kind of same-sex partnership and banned private contracts amounting to marriage with a super-DOMA and was also one of the only states to have a sodomy law before Lawrence v. Texas. Florida’s crime-adjusted incarceration rate has risen over time and is now above average, even as its arrest rates for victimless crimes have fallen substantially. In addition to all of this, gun rights are mediocre, as the state has waiting periods for some weapons, local dealer licensing, stricter-than-federal minimum age for possession, and virtually no open carry.
Idaho is one of the most economically and socially conservative states in the country. As a result, it is perhaps unsurprising that it enjoys one of the very highest levels of economic freedom and one of the very lowest levels of personal freedom. Nevertheless, the state continues to enjoy substantial immigration, primarily from the less-free West Coast. Idaho does well across the board on regulatory policy. It is one of the best states for occupational freedom, despite beginning to license more occupations in 2011. It is one of the very best states for insurance freedom. There is no hospital certificate-of-need requirement, and direct auto sales were legalized in 2013–14.
Idaho is the worst state outside the Deep South on criminal justice policy. Crime-adjusted incarceration rates are nearly two standard deviations above the national average and have been increasing over time. Victimless crime arrests are about average, showing that the state’s real problem is sentencing. It is also much less freer than average for alcohol, cannabis, and gambling. The only personal freedom on which it is much freer than average is tobacco: cigarette taxes are not high, and there is not a smoking ban for bars. Gun rights are better than average, but the state does have a weak law on self-defense in public and a stricter-than-federal minimum age to possess firearms.
Tennessee has long been one of the economically freest states, largely due to its fiscal policies, but it also used to be one of the personally freest states in the South. No longer is that true. The Volunteer State lacks an income tax, and both state and local tax collections fall below the national average. Tennessee is the number two state for labor-market freedom, with a right-to-work law, no minimum wage, relaxed workers’ comp rules, no E-Verify mandate, and federally consistent anti-discrimination law. Tennessee’s land-use regulations are flexible, and it has a regulatory takings law. However, eminent domain reform has not gone far.
Other than on sales taxes and price gouging, where Tennessee gets hit the most is personal freedoms. Criminal justice policies have deteriorated over time. The crime-adjusted incarceration rate is still slightly below the national average but has risen since 2000. Drug arrest rates are now well above the national average. Asset forfeiture is mostly unreformed and cannabis laws are very strict. Tennessee is one of the best states for gun rights, but the rules for open carry are fairly strict. Alcohol freedom is below average because of the blue laws and very high beer taxes, which were raised in 2013–14 to $1.06 a gallon in 2008 dollars. The state has little gambling and educational freedom is low: private school choice programs are nonexistent, and private schools and homeschools face significant regulatory burdens.
5. South Dakota
Formerly ranking number one on the list back in 2012, South Dakota is a quintessential “deep red” state with a vast gulf between its economic and personal freedom. The state has been growing like gangbusters for at least 20 years, but lawmakers might also consider whether man can live by money alone. With an excellent fiscal policy, it has one of the lowest tax burdens in the country, and both state and local tax burdens have fallen over time. It is also relatively fiscally decentralized, and South Dakotans do have some choice among local jurisdictions (1.2 effective ones per 100 square miles). South Dakota’s regulatory policy is also well above average, but it has not improved much, even discounting the PPACA, since 2000.
South Dakota’s criminal justice policies surely qualify as draconian. For its crime rate, it imprisons far more than it should. Drug and other victimless crime arrest rates are all above national norms, however measured. Asset forfeiture is virtually unreformed, though local law enforcement does not participate much in equitable sharing. The cannabis law is harsher than in most states and officials often take DNA samples from nonviolent misdemeanant suspects without any judicial process. Private school and homeschool regulations are not as burdensome as those of the neighbor to the north, but without any school choice programs its educational liberty is below average.
Indiana has quietly built a record as one of America’s freest states and the freest state in the Great Lakes region. Although it has still experienced small net outmigration to the rest of the country over the past 15 years, its record in that department has been better than that of any other of the eight Great Lakes states, and its economic growth has been better than the national average since 2006. Although Indiana’s fiscal policy deteriorated quite a bit between FY 2000 and FY 2009, it has made a good recovery since then. Local taxes have fallen over time, as have government debt and subsidies.
Where Indiana suffers is its health regulations. While the state has been working to improve the effects of the Affordable Care Act on its insurance network, there are still many short comings given its formerly free-market approach. Beyond that, regulations on nursing are more extreme here than most states, with independent nurse practitioners being unable to provide prescriptions and dentists unable to open private practices. There are several personal freedoms denied to residents as well. Smoking bans have not gone quite as far as in other states, but cannabis freedom is virtually nonexistent, and alcohol freedom is only a bit better than the national average, as the state bans offsite, direct-to-consumer wine shipments and off-premises Sunday sales.
The Sooner State comes in at number 3 thanks to its low tax rate and limited land-use regulation. Though its personal freedom lags behind its economic freedom, it has made significant progress on both dimensions throughout the years. Labor law is excellent, with a right-to-work law, no state-level minimum wage, a federally consistent anti-discrimination law, and lighter workers’ compensation mandates than most states. Despite a higher incarceration rate than the national average, victimless crime arrest rates have been declining since 2006
However, Oklahoma is also fiscally centralized. Local taxation is about 2.9 percent of personal income, while state taxation is 4.6 percent of personal income. Government subsidies are lower than average but have risen a touch over time, to 0.06 percent of personal income. Civil asset forfeiture reform has gone nowhere in the past few years and it is still possible to get sentenced to life in prison for a single cannabis offense not involving minors. Also, for a state without a government liquor monopoly, Oklahoma does very poorly on alcohol freedom. It has statewide blue laws, a happy hour ban, a total ban on direct wine shipment, and a ban on wine and spirits in grocery stores.
Alaska is an unusual state because of its enormous oil and gas reserves and revenues. Its fiscal policy scores fluctuate wildly depending on the global price of oil. With the end of the 2000s’ commodity boom, corporate income tax collections plummeted in Alaska, and the state buffered the decline with large withdrawals from its enormous rainy-day fund. Because of this, Alaska has by far the highest cash-to-liability ratio of any state. Also worth noting, the Last Frontier has the lowest tax rate in the country for its residents.
Despite its attractive overall fiscal situation, or perhaps because of it, Alaska does poorly on several important regulatory policy indicators. The labor market is far more regulated than one would expect for such a conservative state: no right-to-work law, strict workers’ compensation mandates, and a high minimum wage. Many occupations are licensed in Anchorage and Fairbanks, where about half of the state’s population lives, and even insurance is heavily regulated.
1. New Hampshire
If you weren’t expecting to see this one at the top of the list, you really should have. Its state motto IS “Live free or die”, after all. With no state or income tax, you’re already have to a great start by bringing home more of your paycheck each week and you save more when spending it. In fact, the only state to pay less taxes is Alaska. Granite Staters also have a wide choice when it comes to electing local government, with two and a half competing jurisdictions every 100 square miles. There is no state set minimum wage, insurance freedom is one of the highest in the country, and arrest and incarceration rates for non-violent drug crimes are very low. In addition to all of this, New Hampshire was one of the first states to legalize gay marriage in the country and is at the top of the list when it comes to gun ownership, making it easy for people to open and conceal carry in the state.
However, despite its mantra, there are still plenty of barriers to freedom that come with living in New Hampshire. For one, to make up for the lack of other taxes, property taxes are sky high. On the subject of property, zoning laws also make it very difficult to build new residential construction projects and eminent domain law is very strong. These things just go to show that no matter how free you think you are, there can always be improvements.