Adjusting state incomes for taxes and price levels may change our perceptions of which US states are poor or rich

Adjusting state incomes for taxes and price levels may change our perceptions of which US states are poor or rich - AEI | Carpe Diem Blog » AEIdeas:

"Earlier this week, The Tax Foundation published the map above that accompanies the article “The Real Value of $100 in Each State.” 
...The four states with the highest RPPs and where the value of $100 is the lowest are Hawaii ($86.06), New York($86.73), New Jersey ($87.34) and California ($89.05), and all of those states have housing costs that are more than one-third above the national average. 
The five states with the lowest RPPs and where the value of $100 is the highest are Mississippi ($115.21), Arkansas ($114.29), South Dakota ($114.16), Alabama ($114.03), and West Virginia ($113.12)...

The Tax Foundation makes a couple of key points:

1. Regional price differences are strikingly large; real purchasing power is 36 percent greater in Mississippi than it is in the District of Columbia. In other words: by this measure, if you have $50,000 in after tax income in Mississippi, you would have to have after-tax earnings of $68,000 in the District of Columbia just to afford the same overall standard of living. Some states, like North Dakota, have high incomes without high prices. Adjusting incomes for price level can substantially change our perceptions of which states are truly poor or rich.

2. Many policies – like minimum wage, public benefits, and tax brackets – are denominated in dollars. But with different price levels in each state, the amounts aren’t equivalent in purchasing power [see related discussion below].

Lots more!