Justin Mungal
Tax is a powerful tool for implementing effective public policy. Few legislative mandates share its efficacy in shaping, seemingly overnight, corporate behavior. Inextricably, it is tied to the notion of the common good insofar as it pools society’s financial resources for funding that vision of social welfare and human well-being. Aside from technological innovation, it stands as one of the greatest formators of our modern economy. For that reason, there is large vested interest in shaping tax code and many a think-tank has arisen around the D.C. metropolitan in order to have a voice at that table of national discussion.
The Tax Foundation recently released its 2017 State Business Tax Climate Index. Their visualization shows a map of the fifty United States of America color coded as blue for the ten worst business tax climates, orange for the ten best business tax climates, and grey otherwise. Also, the individual rankings (1-50) are printed in white on each individual state. The visualization’s goal appears to be to create a KPI based on the results of their study in which they rank states according to 100 variables grouped into the five categories of: corporate taxes, individual income taxes, sales taxes, unemployment insurance taxes, and property taxes. The stated goal of the KPI is to enable tax policy makers to compare their state’s tax system to other American states. The rationale for comparing state tax systems is that most business decisions to move based on tax incentives are intrastate decisions rather than international ones. Thus, the ability to retain business stakeholders is based on the relative favorability of one’s state tax structure to another state’s. Furthermore, by ranking every single state according to 100 variables, states can build themselves a roadmap to improvement based on the differences of tax structure in higher ranking states.
While the visualization is the poster child of the Tax Foundation’s report, I find it exceptionally uninformative. Directly below the visualization they have printed the numerical rankings of each state. This tabular representation of the same data is much more straight forward and easier to digest. For example if I were a tax policy maker from North Dakota, ranked #29, I would have difficulty finding the next best state (i.e. #28) from whom I could learn how to improve my state tax structure. Indeed, one must scour the map until finally locating #28 on the state of Mississippi. Contrast this to the tabular data with its column of overall ranking, where the next best state is easily spotted (loading the table into Excel and filtering the data according to overall rank would make it even easier). Indeed, I find no benefit to studying the visualization over the table, as the mapping of the data essentially scatters the physical location of data whereas the table organizes it. The only benefit of the mapping is that it adds eye-catching color to the eighty-page report.
What I find most disappointing about the Tax Foundation’s visualization is that the report itself is very well done and informative. However, skimming the internet for similar visualizations, I find the Pew Foundation’s:
and Wallet Hub’s: 
maps of state tax data.
The Pew Trust Foundation’s map has more interesting bins by which states are colored and Wallet Hub’s visualization delivers a heatmap; both maps working interactively to show the individual state ranking when the cursor is place over the state. While the Pew and Wall Hub reports cover different domains of data, they point out that a unique perspective on visualizing state tax data rankings is possible. Comparatively, the Tax Foundation’s visualization falls short as it does not offer any new perspective on the table of data immediately below but rather obfuscates those same results for the purpose of soliciting “eye candy.”
Given that the Tax Foundation’s report is high quality, I believe there is room for optimistic hope that their visualization can be improved. Moreover, I personally think that the table of results below the visualization is well organized and sufficiently summarizes their findings. That said, I would add on top of that data another data set that would make the visualization illuminating. For example, the map could be color coded to indicate the hottest states to which businesses relocated to due to tax incentives, with the original report rankings either being numerically printed as they have now or interactively projected as in the Pew map. This layering of data in the visualization would build upon the table and create a convincing argument as to why a state may want to change their tax code and which state’s tax code they should be modeling theirs after. Such a visualization would give state tax policy makers a clearer roadmap to economic success.
Resources:
<https://taxfoundation.org/2017-state-business-tax-climate-index-released-today/>
http://www.pewtrusts.org/en/multimedia/data-visualizations/2014/fiscal-50#ind0 and
https://wallethub.com/edu/best-worst-states-to-be-a-taxpayer/2416/