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May 7, 2012

California Loves Taxes, so More Californians Love Texas

 

Evidence just keeps piling up:  High taxes are a turn-off. Sort of like halitosis on the first date.

According to the California demographer Joel Kotkin, writing in the Wall Street Journal, Californians are bailing out right and left, tired of the hassle and expense of life in a state that doesn’t seem really to like business very much. Unlike Texas, haven’t you guessed? 

News stories and reports about the California-Texas rivalry surfaced a couple of years ago: long  enough ago that you’d think  Golden Staters might have caught on by now and taken remedial action—shaving the tax rate, for one thing; de-regulating, for another.

Instead, says Kotkin, middle-class Californians pay taxes at a top rate—9.3 percent—comparable to rates reserved in other states for millionaires. So Californians flee in ever-larger numbers to low-tax states like Texas. What’s the word that fits here? “Duh”?

A point to keep in mind as media high domes call for reversing some of the recession-necessitated budget cuts Texas made last year is that when it comes to government services, few outrank maintenance of a favorable job climate. If, like California, you penalize work and initiative via the tax system, you pretty soon get less work and initiative. Then you get fewer jobs. In the end (see: California, Illinois, Detroit, etc.) you get fewer people to pay the taxes that finance the jobs a growing community requires. As we were saying: Duh.

Thus, while the ex-Golden State looks frantically for its mojo, Austin gets a $304 million Apple campus and 3,600 new taxpaying workers. Not counting the 1,000 new workers eBay intends bringing to the area. To Kotkin it looks as though Texas is “on a mission to steal California’s tech hegemony.”

And why not? What California seems not to want any more, someone else can certainly use. 


 

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